Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Bankruptcy can wreak havoc on credit, but it may be the only way out of your situation. The advice below will provide you with all the information you need to understand the results of choosing to file for bankruptcy.
Exhaust every other option before making the decision to file for personal bankruptcy. You have other options, including consumer credit counseling help. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Any bankruptcy consultation should be free of charge. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. It is not necessary to decide immediately after your consultation. After your consultations, do some additional research on each attorney you consider qualified for the job.
Seek a less serious option prior to filing for bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. All debt will be eliminated with Chapter 7. All of your financial ties to the people you owe money to will disappear. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
As your read at the start of this article, there is always the option of personal bankruptcy. It should be said that all other avenues should be explored before damaging your credit with a bankruptcy. Staying informed about how to handle this situation can save a lot of headache and allow someone to keep their valuables.