Personal bankruptcy can be overwhelming during the process, but a load off your shoulders once you get through it. On one side, you will need to handle a lot of people looking into your personal finances. This may be very uncomfortable; however, after your bankruptcy case has been completed, you can start anew free from the hassles of bill collectors. Continue reading to learn what you need to know to make your bankruptcy almost painless.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Retirement funds should be avoided at all costs. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Check the accuracy of all information before it is filed. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Seek free consultations from a handful of lawyers, before deciding which one to hire. You should make a final decision only once all of the questions or concerns are sufficiently attended to. Take your time before you decide to file after you meet with your lawyer. This offers you the opportunity to speak with other attorneys.
Familiarize yourself with the bankruptcy code before you file. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Weigh all of your options before declaring bankruptcy. You could find relief from small debts by using a consumer credit counselor. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 most of your outstanding accounts will essentially be erased. Any ties you have concerning creditors will definitely be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Don’t isolate yourself from family and friends. Going through a bankruptcy is never easy. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Some folks tend to stay in the shadows until their case has concluded. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. Make it a point to catch yourself if you feel yourself pulling away from others. Tell others that you would like to do some enjoyable things together while you go through bankruptcy process, then do it.
If you’re concerned about the details of keeping your car, try to ask your attorney about details regarding lowering your monthly payments. You can often lower your payment using Chapter 7 bankruptcy. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
Don’t wait till it’s too late to file for bankruptcy. What a lot of people do is ignore the fact that they are in a financial crisis and think that their debt is not going to catch up to them. 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. When you find that you cannot take care of your debts anymore speak with an attorney for bankruptcy to talk things over.
Before filing for bankruptcy, you must be educated on the specifics of all bankruptcy laws. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? Also, it is illegal to load up your credit cards with debt right before filing occurs.
There are benefits and detriments to filing bankruptcy. No matter why you are filing, you must remember that knowledge is the key to help during the process. What you read above can easily help you get a handle on the entire process. Utilize these tips and let them guide you towards a stress-free financial future.