Bankruptcy is a decision that should be considered carefully before undertaking. By reading this article, you will have a better understanding of all that filing for bankruptcy entails. It’s important that you gather as much info as possible before filing.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Being honest is both the right thing to do and, moreover, it is required by law.
Never pay for a consult with a bankruptcy lawyer, and ask plenty of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Only choose a lawyer if you feel like your questions were answered. It’s isn’t necessary to make a choice right away. Consulting with several attorneys will also help you find someone you trust.
Do what you can to keep your home. There are many options available to help protect you from losing your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Before filing bankruptcy consider every available avenue. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. It is not a quick and easy process to file for bankruptcy. You will have trouble getting credit down the line. This is why it is crucial that you explore your other debt relief options first.
You should weigh every option before thinking about bankruptcy. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Bankruptcy is a hard thing to experience and it could create both emotional and mental stress. You need to do your research to find a good bankruptcy lawyer. Make your hiring decision based on several criteria, not just on price. Think about quality rather than cost when hiring an attorney. Get referred from others who’ve been in the same situation, check the BBB, and interview several people through free consultations. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
Don’t take too long when trying to decide whether you want to file bankruptcy. Although it may be tough to admit you are in financial trouble, the more you wait the higher the debt becomes. By talking to a professional, as soon as possible, they can give you some advice on things you can do before it all gets too complicated.
As this article has demonstrated, you do not have to go through bankruptcy. Filing for bankruptcy is a very involved and precise process. By using the tips in this article, you will be able to successfully file for bankruptcy and begin to rebuild your life.