The mere thought of bankruptcy is enough to strike fear into the hearts of people. It is only natural that people are afraid of skyrocketing debt that causes hardship for themselves and their family members. If this sounds like you and you are experiencing these feelings right now, the advice here will be of help.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If this sounds familiar, you should read up on the bankruptcy laws in your state. Bankruptcy laws vary from state to state. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. It is important to understand the laws in your state before filing for bankruptcy.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Remember that if you can discharge the tax you can discharge the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Never lie about anything in your bankruptcy petition. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.
You should be able to meet with a specialized lawyer for free to ask your questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Only choose a lawyer if you feel like your questions were answered. You don’t have to make your decision right after this consultation. Be sure to talk with a number of lawyers, and compare the information you receive.
Be sure you know how Chapter 7 and Chapter 13 differ. In Chapter 7 most of your outstanding accounts will essentially be erased. Your ties with all creditors will get dissolved. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Safeguard your most valuable asset–your home. Filing bankruptcy does not necessarily mean that you will lose your house. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. Learn the benefits and drawbacks of each type before deciding which is right for you. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. However, if you had a co-debtor, they will be required to pay the debt.
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. What you can’t file on is very small, like student loans or child support payments. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Anyone who is wary of filing for bankruptcy has probably heard how frightening the process can be. Even though you feared bankruptcy before, this article can rid you of that fear. Use this personal bankruptcy advice as soon as possible and make things better for yourself and your loved ones.