Debt has become a problem for many people facing this tough economy. They are hounded by creditors and collection agencies, and their bills show no sign of slowing down. If this description applies to you, you may wish to think about filing for personal bankruptcy. Continue reading this article so you can figure out if this is something you should do.
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. The rule here is that if you can get the tax discharged then you can get the debt discharged. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. You should not use your retirement savings unless the situation calls for it. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Never lie about anything in your bankruptcy petition. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
After a bankruptcy, you may not be able to receive any credit cards. If that’s the case, it is beneficial to apply for one or even two secured cards. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. 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.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
You should never pay for your first consultation with a bankruptcy attorney. Make the most of this free consultation by asking lots of questions. Seek free consultations from a handful of lawyers, before deciding which one to hire. Therefore consult with different lawyers and get a feel for them, then decide which one suits your needs Take your time choosing the right attorney to assist in your bankruptcy. That gives you the chance to speak to a number of lawyers.
If you are about to file for bankruptcy, then make sure you hire a lawyer. With all the ins and outs of bankruptcies, it can be hard to grasp all the knowledge. An attorney will make sure that everything is being done correctly.
Familiarize yourself with the bankruptcy code before you file. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 eliminates all debts. Any ties that you have with creditors will be dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You must know about the different bankruptcy types, and how each can affect you.
Make sure bankruptcy is truely your only option before filing. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. Loan modification plans on home loans are a great example of this. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
Once the initial filing period is over, ensure that you are getting out and enjoying life. It can be several months between the initial filing and the final discharge of debts. That stress could lead to complete depression, if you do not take the necessary steps to fight it. Things will be sunnier after you take positive steps to move forward.
Know the laws and guidelines about bankruptcy before you formally file. There are several pitfalls with personal bankruptcy that can make your case harder to handle. If you commit severe mistakes, your bankruptcy could be dismissed. It is important to learn the bankruptcy code before filing bankruptcy. If you take care of this now, you can avoid problems going forward.
If you have reached a point where you are forced to file bankruptcy, you can now understand that many resources are available to help you. 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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