Although going through bankruptcy can be very hard, it is sometimes necessary. If you are thinking about filing for bankruptcy, it’s best to be armed with as much information as possible. The information in this article contains information and advice from people who have actually gone through the process.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this is your case, you should do some research about bankruptcy laws in your state. Every state is different when it comes to dealing with bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Know what the laws are in your state before filing.
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. Generally speaking if you can discharge the tax, you can discharge the debt. This makes using a credit care irrelevant, since bankruptcy will discharge it.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. This being the case, look at secured card options. By doing this, you will be letting people know that you want to fix your credit score. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Do some research about laws and legislation before filing. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Protect your home. Filing bankruptcy does not necessarily mean that you will lose your house. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Be sure that bankruptcy really is your best option. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy is not a simple, breezy course of action that should be taken lightly. Your future credit will be affected by these actions. This is why you must ensure that bankruptcy is the only option left for you.
You could see about filing for Chapter 13 personal bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Be around family as much as possible. Going through a bankruptcy is never easy. Having to declare bankruptcy leaves many people feeling like a failure. A lot of people become depressed and withdrawn until their bankruptcy is discharged. However, this isolation will just make you feel worse, and it could cause you to be depressed. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.
Before you file for bankruptcy, make sure you understand your rights. Some debtors will try to tell you your debt with them can not be bankrupted. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Filing for bankruptcy is hard on anyone, and can cause extreme amounts of stress. In order to keep things together and protect yourself from excess stress, be sure to hire a competent attorney. Don’t think that the highest priced attorney is the best. It is not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
Sometimes declaring bankruptcy is simply the only viable option, even though it’s one that nobody wants to take. Since you’ve read the advice found in this article, you know what has worked for others who have filed for bankruptcy in the past. You can take comfort in the fact that others have been in this situation before you, so take heed from their experiences to help you deal with your own.