Debt is something a lot of people have to deal with on a daily basis. They are hounded by creditors and collection agencies, and their bills show no sign of slowing down. If you are experiencing overwhelming stress due to your financial situation, you might want to think about filing personal bankruptcy. Read on to learn if bankruptcy is the best decision for you.
Generally bankruptcy is filed when a person is facing insurmountable debt. If this sounds familiar, you should read up on the bankruptcy laws in your state. When it comes to bankruptcy, states have varying laws. 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.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. The United States Some valuable resources include the U.S. Dept of Justice and American Bankruptcy Institute. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
Credit Cards
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
It should go without saying, but refrain from lying in your bankruptcy filings. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. It is a good idea to consult several attorney before deciding on one. Do not make any final decisions until every question you have has been answered. Take your time choosing the right attorney to assist in your bankruptcy. You have lots of time for consulting with other lawyers.
Chapter 13
You need to educate yourself on the differences between Chapter 7 and Chapter 13. If Chapter 7 is what you file, your debts will get eliminated entirely. The ties with the creditor will be broken. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Meet with a few attorneys who offer free consultations before hiring one. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Look for a lawyer who you can relate to.
You can take steps to hang onto your house. Filing for bankruptcy doesn’t automatically involve losing your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Repayment Plan
Don’t automatically assume that bankruptcy is your only option. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. 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.
Clearly, it is possible for those thinking of filing for bankruptcy to get a great deal of assistance. When you handle it correctly, a bankruptcy can resolve a great number of your financial troubles and enable you to start turning your life around.
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