There are quite a number of people who have been affected by the economy, and now find themselves buried in debt. Threats come from collection agencies and other creditors while the bills just keep piling up. If you are experiencing overwhelming stress due to your financial situation, you might want to think about filing personal bankruptcy. Continue on to the article below to see if bankruptcy is the right option for you.
Most people end up filing for personal bankruptcy because they owe more than they make. If you are in this position, you need to be familiar with the laws in your area. Different states have different laws regarding bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. Be sure you educate yourself on local laws prior to filing.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. If the tax has the ability to be eliminated, the debt can be too. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. No matter what you do, do not touch your personal savings unless there is no other option. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
It is important to understand your rights when filing bankruptcy. Bankruptcy might help you get back things you thought you’d lost and had repossessed, such as electronics, vehicles and jewelry. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Speak with your attorney about filing the correct petition to get your property back.
Credit Score
If you are earning enough to cover your bills, don’t file for bankruptcy. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. The process of filing for bankruptcy can make people a nervous wreck. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Once the process if over, your life will improve.
Chapter 7
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
When filing for personal bankruptcy you should always be aware of your rights. Some debtors will try to tell you your debt with them can not be bankrupted. There are not many debts that can not be bankrupted, student loans and child support for example. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
It is important to not wait for the final minute to petition for bankruptcy. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
Make a list of all your debts before filing. If you do not complete your financial profile your case could be delayed or dismissed. No sum is too small to be included; err on the side of caution and include everything. When it comes to the types of things you might not be thinking about adding, just think about any automobiles you have, any money under the table you’re making, etc.
Be careful how you pay off any debts prior to filing for personal bankruptcy. When you’re planning on filing bankruptcy, your finances have to be in a state of limbo, for lack of a better term. Paying off creditors, transferring assets, and acting in any way other than financially strapped may result in a failed claim. Know the laws prior to deciding what you are going to do.
When you file for bankruptcy remember that you are not going to lose all your assets. Personal property can be kept. Items like clothes, electronics, household furnishings, and jewelry are included in that category. Depending on where you live and what you’re filing for, you might be able to keep you home and things like you car.
As you can see, there is a lot of help available if you are considering filing for personal bankruptcy. If you open your mind to this process and think clearly, it can lead to better financial situation and leave you in a much better position than before.
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