Deciding to file for bankruptcy is serious and should be looked at seriously. Doing your research, partially by reading articles like this one, is an important first step in filing for bankruptcy. Take the time to educate yourself before you make your choice.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If you find yourself going through this, you should know all about the laws that are in your state. Each state has its own set of rules regarding bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Bear this in mind; if the tax can be discharged, then the debt can be as well. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. If that is the case, you should try applying for one, or two secured cards. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. If you do well with a secured card and make strides to repair your credit, you will ultimately be able to receive an unsecured card.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
Before filling for bankruptcy, determine which assets will be exempted from seizure. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you fail to do so, things could get ugly.
Do not abandon hope. There may still be way to get repossessed items back after you file for bankruptcy. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
Brush up on the latest bankruptcy regulations before you decide whether or not to file. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. To know what these changes are, go to your state’s website or contact the legislative offices.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Every one of your debts will be gone if you decide to go with Chapter 7. Your former ties with creditors will cease to exist. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
As you are aware from the previous paragraphs, bankruptcy is not something that just happens. There are quite a few things you you need to do and do correctly. By following the above advice, you will make fewer mistakes and find yourself better prepared.