Though making the choice to file bankruptcy is never easy, it is often essential. The more you educate and prepare yourself for the bankruptcy process, the better prepared you will be to handle it. This article contains wisdom and knowledge to help you fully understand the bankruptcy process.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you fail to do so, things could get ugly.
A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. Learn the benefits and drawbacks of each type before deciding which is right for you. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
If you are earning enough to cover your bills, don’t file for bankruptcy. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
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 could morph into clinical depression, if you fail to adequately address the problem. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. It is a little more difficult, though. Before you can take out a new loan, you will have to clear it with your trustee. Document your budget to prove that you’re going to be able to make the payments. You’ll also need a valid reason for making the purchase.
Find the right time to take action. Timing is very important when it comes to personal bankruptcy filings. While there are times that it is ideal to file soon, there are other times in which you should wait. Discuss the strategic timing of your bankruptcy with your attorney.
Bankruptcy can cause anxiety and a host of other physical and emotional issues. Make sure that you hire an experience lawyer to get your bankruptcy done properly. Try not to pick a lawyer based on cost alone. While the person you select does not have to cost the most, they should be competent and reliable. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. Attending a court hearing will give you experience as to how lawyers handle these cases.
Bankruptcy laws are very exact and very important, so ensure that you’re well aware of all current laws before you file a petition. For instance, for 365 days before filing, no one is able to receive assets from the filer. Also, you can’t go and max out your credit card just because you are about to file for bankruptcy.
Don’t file for personal bankruptcy until you’ve looked into your other options. You may want to consider credit counseling. There are even non-profit companies that may be able to help you. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. All you have to do is give them your payments and they handle paying the creditors.
Most people that file for bankruptcy try not to use credit cards again. However, this is not a good idea because it is desirable to heal your credit rating. If you never work on rebuilding your credit after a bankruptcy, you may not be able to qualify for a car loan or mortgage. You can rebuild your credit slowly, beginning with just one credit card.
No one is eager to file for bankruptcy, but in many cases, the alternatives are even worse. Having studied the information in this article, hopefully you are better prepared to deal with the bankruptcy process. By learning from others that have been in the same situation, it will make it easier on you in the long run.