Anytime you are faced with the prospects of filing for bankruptcy, it is not a good situation, but there is some light at the end of the tunnel when you get through this process. The bankruptcy option was created to give you another chance to live a financially responsible life. By following the tips presented here, you can transform your life through personal bankruptcy.
Generally bankruptcy is filed when a person is facing insurmountable debt. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. You will find that each state has their own bankruptcy laws. For instance, some states protect you from losing your home in a bankruptcy, but others do not. You should be familiar with the laws for your state before filing for bankruptcy.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Generally speaking if you can discharge the tax, you can discharge the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
It is important to remind your lawyer of any details that may be important to your case. It is wrong to assume that your lawyer will remember every word you ever utter! Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. Although you may find a good lawyer through an advertisement, you can simply find a much better lawyer if the lawyer is recommended to you by someone who has gone through the process and who has the inside track on the lawyer’s true capabilities.
Never pay to have a consultation with a lawyer, and ask a lot of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs Take your time choosing the right attorney to assist in your bankruptcy. That gives you the chance to speak to a number of lawyers.
60 Month Period
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. In Chapter 7 bankruptcy, your debts are all eliminated. Any debts that you owe to creditors will be wiped clean. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Always protect your house. Filing for bankruptcy does not always mean you will end up losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Don’t hide from your friends and family while you go through bankruptcy. Bankruptcy can really wear down your emotional reserves. Having to declare bankruptcy leaves many people feeling like a failure. Most people adopt a very negative attitude toward bankruptcy. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Do not forget to enjoy life a little once you get through the initial filing process. Many debtors stress-out during the time of filing. This stress may lead to something worse like depression, so do what you can to fight that from happening. Once the process if over, your life will improve.
A great tip to remember if you have filed for Chapter 13 is that you will still be able to receive a loan, so you shouldn’t refrain from trying. It’s a bit more difficult, though. You have to meet with your trustee to get approval for the new loan. Document your budget to prove that you’re going to be able to make the payments. You will need to be able to explain why the purchase is necessary.
The road to personal bankruptcy is a sad and difficult one. However, the story that gets written after bankruptcy does not have to be depressing too. In fact, if you apply the ideas and advice given in this article, you can truly make bankruptcy a turning point in your life towards better days.