Filing for bankruptcy is a decision that shouldn’t be undertaken without a lot of deliberation. There are many factors involved in the bankruptcy process and it is crucial that you understand them. The information below can guide you. Whatever tough decisions you must come to face with, research can help you find your way!
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If you find yourself in this situation, you may want to think about getting a secured card or two. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After some time passes they may be willing to offer you unsecured credit.
Seek a less serious option prior to filing for bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Safeguard your home. There are many options available to help protect you from losing your home. There are mitigating factors, such as lose of value, or multiple mortgages. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Make time to visit with family and friends during the bankruptcy process. The process for bankruptcy can be brutal. Having to declare bankruptcy leaves many people feeling like a failure. Most people adopt a very negative attitude toward bankruptcy. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.
When your income surpasses your bills, you should not be filing bankruptcy. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
When you do file for bankruptcy, make sure you know your rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. 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.
Because of the comes from bankruptcy, you may feel overwhelmed and stressed. To combat these problems, look into securing a good lawyer. Don’t think that the highest priced attorney is the best. The cheapest attorney may not be the best, but the most expensive may not be the best either. Speak to those around you at work or social settings, who have dealt with this. Make the most of the BBB and consultations with attorneys to increase your knowledge and decision-making ability. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
As you are heading towards a bankruptcy filing, don’t be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. Doing so, is a type of fraud that may result in your having to pay back all money advanced from credit card accounts in the months just prior to your bankruptcy.
Exercise some caution in repaying your debts when you know a bankruptcy filing in your future. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. Know the rules before you jump in feet first.
Just because you have filed for bankruptcy will not necessarily mean you are going to have to give up everything you own. When you file for bankruptcy, you are allowed to keep personal property. Items such as family mementos, home decor, furniture, personal jewelry, clothes and more fall under private property. What you are allowed to keep depends on the laws of your state, the chapter under which you file for bankruptcy and how much money you owe to your creditors.
As this piece suggests, personal bankruptcies come in different packages. Don’t let the amount of information overwhelm you! Take a few minutes to think about these tips. The more level-headed you can remain throughout this process, the better the choice will be that you make.