The process of filing for bankruptcy can bring both stress and relief into your life. The stress is having to deal with your financial crisis and those involved in the process. The relief is that your phone will stop ringing with harassing phone calls from debt collectors, and you can begin to rebuild your credit. Continue reading to learn what you need to know to make your bankruptcy almost painless.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Generally speaking if you can discharge the tax, you can discharge the debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Avoid ever touching retirement funds until you have no other choice. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
It should go without saying, but refrain from lying in your bankruptcy filings. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Don’t fear reminding your attorney of any specific details of your case. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. All information submitted to the court with your signature needs to be double checked.
Before filing for bankruptcy, hire a qualified attorney. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. A qualified bankruptcy attorney can guide you through the filing process.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. Your state’s website should have the information that you need.
Before declaring bankruptcy, be sure you’ve weighed other options. You could find relief from small debts by using a consumer credit counselor. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. The ties with the creditor will be broken. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Before filing for bankruptcy ensure that the need is there. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. It is not a quick and easy process to file for bankruptcy. It will have a long-lasting effect of your future credit opportunities. So, consider bankruptcy only as a last resort when you have no other choice.
Bankruptcy can be a good time to spend time with people you love. The bankruptcy process can be brutal. Having to declare bankruptcy leaves many people feeling like a failure. Avoidance of friends of family during the process is not uncommon. However, this isolation will just make you feel worse, and it could cause you to be depressed. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
When your income surpasses your bills, you should not be filing bankruptcy. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
Chapter 7 Bankruptcy
Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. However, creditors can demand co-debtors pay the amount in full.
Think about the pros and cons before filing. No matter why you are filing, good information is needed. After reading the tips we present here, you will be able to manage your bankruptcy filing with ease. Make good use of these tips. You will be glad you did.