The circumstances that culminate in a bankruptcy filing are likely unpleasant, though they do not need to define the rest of your life. The whole point is to wipe the slate clean and have a new chance at life. Keep reading for how you can make bankruptcy a second chance instead of financial doom.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Laws differ from one state to the other. In some states, your home is protected, while in others it is not. It is important to understand the laws in your state before filing for bankruptcy.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
It should go without saying, but refrain from lying in your bankruptcy filings. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. A great way to rebuild your credit is to apply for a prepaid credit card. You can exhibit your desire to rebuild your credit this way. After a while, you may be able to get unsecured credit again.
Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in the yellow pages. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. It is necessary to be open regarding both the positive and negative aspects of your financial life. You are in this situation, now help them to give you the best assistance possible to deal with it. You do that by giving full disclosure and holding nothing back.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. 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. Your state’s legislative offices or website will have up-to-date information about these changes.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 bankruptcy, your debts are all eliminated. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. Look into both types of bankruptcy before deciding which one would suit your particular needs.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. By shopping lawyers, you will be more likely to find one that makes you comfortable about the process.
Safeguard your home. Filing for bankruptcy does not always mean you will end up losing your home. If your home value has gone down, or if there’s a second mortgage, you might be able to keep 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.
Filing for bankruptcy is hard on anyone, and can cause extreme amounts of stress. If you want to protect yourself from stress, see to it that you hire a good attorney. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. What you need is a thoroughly competent lawyer, and this does not imply that you have to pay through the nose. Look to the bureau for better business, consultation, as well as others who have formerly experienced bankruptcy for more information about lawyers. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
Prior to filing, it is important that you know all about bankruptcy laws. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? It is also against the law to max out your credit cards before filing for bankruptcy.
Before you decide to file a bankruptcy claim, you need to first come to realization that it’s time to start living a more financially responsible life. You must not doing anything that will raise your current level of indebtedness for several months before filing a bankruptcy petition. Your creditors will take your current finances into account when assessing your bankruptcy filing. Your current spending behavior should show that you are making a real effort to modify your financial habits.
In conclusion, most circumstance that lead to bankruptcy are not positive. That said, filing for bankruptcy can be a positive turning point in your life. If you use these tips, you may be able to use bankruptcy to make your life better going forward.