The whole process of filing bankruptcy is complicated. There are different kinds of bankruptcy you can file, and the kind you select depends on your individual financial picture and what types of debt you have. You should learn as much as possible about personal bankruptcy if you are trying to make a decision to file or not. The following tips will help put you on the right path.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Try to make certain you are making the right choice prior to filing your petition. Debt advisors are one of the many other avenues you can consider. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Thing about filing a Chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. You can secure your home under Chapter 13 and pay your debts with a payment plan. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
If you are making more money than you owe, bankruptcy should not even be an option. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Remember that your Chapter 7 filing may affect other people in your life as well. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. Any co-debtor may well be held responsible for paying off the total remaining amount of the debt, though.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. It is much harder. You will need to secure the trustee’s approval for any new debt obligation. Create a budget and prove that you will be able to afford it. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Make sure the time is right when you file a bankruptcy claim. When filing for personal bankruptcy, it is very important that you act at the correct time. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Make a list of all your debts before filing. Failing to list these could cause the dismissal or delay of your bankruptcy petition. You might think something is insignificant, but you should add it anyway. That may include secondary jobs, any cars or trucks you want to be considered assets and any current loans.
Before you file for bankruptcy, you must commit to acting more responsible with your finances. Avoid incurring new obligations or allowing existing debt to grow in advance of your bankruptcy. Judges as well as creditors will consider you current and past history when they’re adjudicating personal bankruptcy. Let them see how you are making positive changes to your personal financial management by demonstrating what you are doing right now.
When you file for bankruptcy, it doesn’t mean that you will lose your assets. Many times you will be allowed to keep your personal property. Things like jewelry, clothes, and electronics are included in this category. It will be dependent on your own personal circumstances and the laws in your state, but you might also be able to keep your house and care.
List any debt you have. This will be the basis for your bankruptcy filing, so make sure you include all the debts you are aware of. Always go through your statements and get exact numbers. Don’t do this process too fast because these amounts won’t get discharged if the numbers aren’t right.
Try to get a referral from a trusted source before choosing an attorney to handle your bankruptcy and make sure they have no issues with the state bar or the better business bureau. Because of the increase in bankruptcy filings, this field attracts a lot of newer, inexperienced attorneys. Ensure that the attorney you choose is experienced and has the proper license. You can check your state’s bar association to see if the lawyer has had any disciplinary action taken against him, and review sites to see if his clients are satisfied.
Do a check of your credit report from all the top companies who report on consumer credit after two or three months have passed following your bankruptcy. Be certain that the report is an accurate representation about your discharged debts and accounts for credit cards that are closed. Ask about any discrepancies once you see any, so that you could start repairing your credit.
Now you know why bankruptcy filing is a type of decision that needs to be carefully thought out before being pursued. If you know what makes sense for you, you can work with an experienced bankruptcy lawyer and get ready to experience a clean financial slate.