A lot of people are in debt right now. Their bills pile up higher while debt collectors and creditors keep their phones ringing constantly. If this situation sounds familiar, you may decide to consider filing personal bankruptcy. Continue reading this article to find out if bankruptcy is something you need to consider.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Bear this in mind; if the tax can be discharged, then the debt can be as well. It is pointless to use credit cards if they can be discharged.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Don’t touch retirement accounts unless you don’t have a choice. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Always be honest and forthright when it comes to your bankruptcy petition. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Never pay for a consult with a bankruptcy lawyer, and ask plenty of questions. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Don’t hire an attorney who fails to address all your concerns and questions. There is no need to offer an immediate hire, so take your time. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. You could find relief from small debts by using a consumer credit counselor. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7, for example, will wipe away every one of your outstanding debts. Any ties you have concerning creditors will definitely be dissolved. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. Look into both types of bankruptcy before deciding which one would suit your particular needs.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Consider Chapter 13 bankruptcy, if you chose to file. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Chapter 7 Bankruptcy
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. Once you file for Chapter 7 bankruptcy protection, you no longer have legal responsibility for debts that you and any co-signers originally agreed to. However, creditors can demand co-debtors pay the amount in full.
Do not put off filing for bankruptcy. A lot of people ignore their financial problems, thinking they are going to go away; that is a big mistake. Being in debt can quickly put you into very deep hole and if you do not rectify the situation fast, you could face wage garnishment or even worse, foreclosure. As soon as you see your debts getting out of control, seek the counsel of a good bankruptcy attorney to see what your options are.
Do your research before hiring a bankruptcy attorney. There are many new or inexperienced newcomers who choose this field to practice in. Always confirm that your lawyer is highly experienced and licensed to handle a bankruptcy. By researching online you can check out a lawyer’s credentials, as well as customer reviews and any disciplinary action against him or her.
Once your bankruptcy has been complete for a month or two, acquire multiple copies of credit reports. Look to see that the reports have accurately documented your discharge and other information. Resolve any problems immediately so you can build up your credit score as quickly as possible.
Hopefully, you now understand that there are many options open to you when you are giving a personal bankruptcy filing serious thought. If you open your mind to this process and think clearly, it can lead to better financial situation and leave you in a much better position than before.