Declaring bankruptcy is anything but easy. There is more than one type of personal bankruptcy, and your personal financial situation will dictate which type you should choose. Therefore, it is essential that you learn about bankruptcy prior to petitioning the courts for bankruptcy protection. The following tips can help you get started.
Retirement Accounts
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Avoid touching your retirement accounts whenever possible. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Do not be afraid to remind your attorney of important specifics of your case. Inaccurate or incomplete information can lead to your petition being denied. Don’t fear speaking up since it affects your case and future.
It can be difficult to obtain unsecured credit once you have filed for bankruptcy. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. When you do this, it shows your determination to fix your credit history. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
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. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
If you’re going to file bankruptcy, you need an attorney. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Learn the newest bankruptcy laws before filing. These laws change regularly and you should stay up-to-date so you can make the best decisions. To learn about any changes, search the Internet or contact your state’s legislative office.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 involves the elimination of all of your debt. Your ties with all creditors will get dissolved. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Keep in mind that missed payments will trigger dismissal of your case.
Talk with your lawyer about getting lower payments for any car you wish to keep. Filing for Chapter 7 can help to lower your monthly payments on possessions such as your vehicle, helping to ease your financial load. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
An understanding of your rights is important before filing for bankruptcy. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. Bankruptcy can sometimes leave people feeling guilty, ashamed and alone. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
When filing for personal bankruptcy, always supply all of your financial information. If you forget to add these, your petition could be delayed or dismissed. Even if you think a sum is insignificant, add it into your documentation. Don’t forget about side jobs, loans you’ve taken out or vehicles that might count as assets.
Know the laws and guidelines about bankruptcy before you formally file. There are many laws which govern bankruptcy; therefore, to protect your bankruptcy case, know the rules. Some mistakes in your papers can cause your case to be dismissed. Take time to research things related to personal bankruptcy before you move forward. If you take care of this now, you can avoid problems going forward.
Bankruptcy will erase debts. Don’t create any new debts before filing for it. This is illegal. It’s fraud, and you can still be responsible for paying it back even after declaring bankruptcy.
You likely now understand that bankruptcy is something that should be undertaken carefully and with great deliberation. If you know what makes sense for you, you can work with an experienced bankruptcy lawyer and get ready to experience a clean financial slate.
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