The decision to file for personal bankruptcy must not be taken for granted. Do not file unless you fully understand the consequences and implications. Apply the advice from this article to go down the right path. Whatever your particular difficult situation entails, you can learn how to handle it with a little research.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If this is your case, you should do some research about bankruptcy laws in your state. Different states have different laws regarding bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. It is best to become familiar with your state’s laws regarding bankruptcy before you take the steps to file.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The U.S. Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. The more knowledge you have, the more you are able to make right decisions and find a new future.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Not only is hiding income and assets wrong, it is also a crime.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. It is important to know what types of possessions may be taken away before they actually are seized.
Never pay to have a consultation with a lawyer, and ask a lot of questions. Most lawyers offer free consultations, so talk to a few before making your decision. Make your decision after all of your questions have been answered. There is no need to offer an immediate hire, so take your time. Take the time to meet with a number of attorneys.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
You could see about filing for Chapter 13 personal bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. Many times creditors are happy to work with you to ensure that you will repay your loan.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. It is a little more difficult, though. Normally, the trustee assigned to your bankruptcy must approve any new loan. Draw a budget up and show how you can pay the newer loan payment. You will also need to explain why it is necessary for you to take out the loan.
Bankruptcy can get a bit tricky at times, but as long as you’re using what you learned here, the process should be a lot easier. Don’t let all the information and regulations surrounding bankruptcy overwhelm you. Take some time to figure things out. You will be more likely to make beneficial and thoughtful decisions as a result.