Debt is something a lot of people have to deal with on a daily basis. Collection agencies constantly hunt them down and their bills keep increasing. If you find yourself in these circumstances, you might want to think about filing for personal bankruptcy. Continue reading to learn more about whether you need to file for bankruptcy or not.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. If the tax can be discharged, so can the debt. It is pointless to use credit cards if they can be discharged.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. Retirement accounts should never be touched if it can be helped. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
You might experience trouble with getting unsecured credit after filing for bankruptcy. If so, apply for a secured credit card. By doing this, you will be letting people know that you want to fix your credit score. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. The Bankruptcy Code has lists of various asset types that are exempt during the process. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Most lawyers offer free consultations, so talk to a few before making your decision. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. This offers you the opportunity to speak with other attorneys.
Before declaring bankruptcy, be sure you’ve weighed other options. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. This type of bankruptcy ends any relationship you might have with creditors. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. Searching for the best lawyer will help you located the comfort you need during this time.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Learn the benefits and drawbacks of each type before deciding which is right for you. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
If you have reached a point where you are forced to file bankruptcy, you can now understand that many resources are available to help you. If you deal with your stress in a positive way and make level-headed decisions, your bankruptcy filing will be a step in the right direction for a renewed financial future.