Learning more about the process of bankruptcy is, sadly, something that a lot more people have to do today. There are many who recognize the role the economy has played in this epidemic. However, before you make the decision to file for personal bankruptcy, you should understand the filing process and thoroughly investigate whether it is the right choice for you. Read further for some helpful advice regarding bankruptcy.
Many people need to file for bankruptcy when they owe more money than they can pay off. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. You will find that each state has their own bankruptcy laws. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Be aware of bankruptcy laws before filing your claim.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Always be honest and forthright when it comes to your bankruptcy petition. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Consider Chapter 13 bankruptcy for your filing. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
Don’t automatically assume that bankruptcy is your only option. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. Look into loan modification plans if you need to deal with an imminent foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Most creditors will be willing to work out an option to avoid not getting paid at all.
Find ways to relax while you go through the process of filing for bankruptcy. Many people who undergo this process become way too stressed out. Depression can ensue from the stress if action isn’t taken. Once the process is complete your life will improve.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. Most states allow for the majority of debt to be included on a bankruptcy. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
Find the right time to take action. Timing is critical, particularly when it comes to filing for bankruptcy. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
As you can see, bankruptcy is quickly becoming more popular due to the poor state of our economy. By following the advice presented here, you can make sound decisions in regards to your relationship with personal bankruptcy.