If you were unfortunate enough to have your property repossessed by the tax man, you should probably consider bankruptcy. There are times when bankruptcy is the last option left, even if it substantially damages your credit score. Read this guide in order to know more when it comes to filing bankruptcy as well as the consequences of doing so.
If you can, get a word-of-mouth referral for a lawyer. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Divulge all of your information so that you and your lawyer can devise the best strategy for dealing with your situation.
Before filing a bankruptcy claim, make sure that your home is well protected. Bankruptcy filings don’t necessarily have to end in the loss of your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Don’t file for bankruptcy unless it’s absolutely necessary. Maybe you can just consolidate debt to make it simpler to deal with. Going through a bankruptcy is a long and stressful process. It will also limit your ability to get credit for the next few years. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
If you are going to be filing for bankruptcy, think about filing Chapter 13. 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. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Do not forget to be around those you love. Going through a bankruptcy can be an excruciating experience. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. A lot of people become depressed and withdrawn until their bankruptcy is discharged. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
A great tip to remember if you have filed for Chapter 13 is that you will still be able to receive a loan, so you shouldn’t refrain from trying. This is a lot harder. Your trustee must approve any new loans such as this. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. You will need to be able to explain why the purchase is necessary.
When filing for personal bankruptcy you should always be aware of your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. There are, indeed, some debts that cannot be bankrupted. Among them are student loans, child support and alimony payments. Should you face a creditor like this, and you are informed that the debt is not valid under the bankruptcy. These types of infractions should be reported.
Find the right time to take action. Timing is everything, especially in personal bankruptcy filings. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
It goes without saying that, bankruptcy is always available as an option. But, filing ought not to be an automatic decision, as it does have serious implications. Learn all that you can about bankruptcy before you file. That way, you will be prepared to make the best decision for a happy financial future.