Just thinking about bankruptcy is a scary thought for many people. Mounting debt, combined with insufficient support for the family, is a horrible experience for a large number of people. If this scares you, or you are experiencing this living horror, then this advice will be of use to you.
Many people need to file for bankruptcy when they owe more money than they can pay off. If you find yourself going through this, you should know all about the laws that are in your state. Different states have different laws regarding bankruptcy. For instance, your home might be protected in some states while you might lose it in others. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Bear this in mind; if the tax can be discharged, then the debt can be as well. This means using a credit card is not necessary, when it will just be discharged.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. It is important to be aware of this list so you will know what assets are saved. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. All of your financial ties to the people you owe money to will disappear. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Spend time researching the advantages and disadvantages of filing for each one of these. Before making any decisions, discuss the information you have learned with your lawyer.
Think about all your options before pulling the trigger. Before filing, talk with an attorney who can help you weigh all of your options. A plan that can be useful when foreclosure is looming is a loan modification. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. Of course, it’s difficult. Your trustee must approve any new loans such as this. Create a budget and prove you can afford a new loan payment. You will also need to have a good reason why you need the item.
People who say that bankruptcy is a scary experience aren’t exaggerating. Though the fear may be great, you can alleviate some of that with this article. Take this advice to heart, and do everything possible to improve your situation.