Filing for bankruptcy is not a pleasant experience. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. Don’t give into it and be sure to use this advice to figure out what you need to know to avoid bankruptcy.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If you are in this position, you need to be familiar with the laws in your area. Every state has a separate law having to do with bankruptcy. For instance, your home might be protected in some states while you might lose it in others. You should be aware of local bankruptcy laws before filing.
Be sure you’re doing what’s right before you file for bankruptcy. You have other options, including consumer credit counseling help. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Do not tap retirement accounts unless there is no other alternative. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Make sure you keep reminding your attorney about any important details in your case. Inaccurate or incomplete information can lead to your petition being denied. Do not hesitate to speak up; this is your hearing and your future is on the line.
The best way to build your credit up after a bankruptcy is making all your payments on time. If you find yourself in this situation, you may want to think about getting a secured card or two. This will show other people that you’re serious when it comes to having your credit record in order. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Find out what you exemptions are prior to filing bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. This will ensure that you do not have any surprises once you have filed bankruptcy.
Don’t hide assets or liabilities when filing for bankruptcy. Whoever provides your legal consultation must be privy to all of your financial information. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. You don’t need to decide what to do right away. You can take as much time as you need to meet with different lawyers.
Learn all the latest laws before you file bankruptcy. Laws are subject to change, and it’s important that you’re educating yourself about current code only. To learn about any changes, search the Internet or contact your state’s legislative office.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Remember to only file for bankruptcy if you need to. Sometimes consolidating your existing debts can make them more manageable. It is not a quick and easy process to file for bankruptcy. Credit will be much harder for you to come by after you file for bankruptcy. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Chapter 13 Bankruptcy
Consider if Chapter 13 bankruptcy is an option. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
As you can see, you don’t need to surrender to bankruptcy. The tips from this article can now guide you on the right path to avoid bankruptcy. Use the information you have learned here, and see how you can revamp your finances and protect your valuable credit history.