The economy is terrible today. A poor economy means more people than ever have debt and are losing their jobs. Many of these debts end up in bankruptcy filings, which just makes the problem worse. If you are dealing with the possibility of filing for bankruptcy, then continue on to the article below for some helpful tips.
Most people end up filing for personal bankruptcy because they owe more than they make. If this applies to you, be sure that you know what the laws of your state are. Every state has a separate law having to do with bankruptcy. In some states, your home is protected, while in others it is not. Become acquainted with local bankruptcy laws before filing.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. If the tax can be discharged, so can the debt. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. This will ensure that you do not have any surprises once you have filed bankruptcy.
Do not give up hope. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Get help from your lawyer to file a petition so you can get your items back.
If you’re going to file bankruptcy, you need an attorney. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Learn all the latest laws before you file bankruptcy. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. To know what these changes are, go to your state’s website or contact the legislative offices.
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. Should you choose Chapter 7, your total debt load will be erased. All happenings with creditors will disappear. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Determine if bankruptcy is necessary. It may be that all you really need to do is consolidate some of your debts. Bankruptcy is a stressful process. It will also limit your ability to get credit for the next few years. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. You can secure your home under Chapter 13 and pay your debts with a payment plan. Expect to make payments for up to 5 years before your unsecured debts are discharged. Keep in mind that missed payments will trigger dismissal of your case.
You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. There are extra hoops to jump through. Your trustee can help you acquire a new loan. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Even though there are rumors that the economy is improving, lots of people are jobless or under employed. Even if you do not have a steady income, you may still be able to avoid bankruptcy. This article has likely given you some ideas on how you can protect yourself from having to file for bankruptcy. Best of luck.