Sadly, bankruptcy is now a household word. Not only the economy, mind you, but people’s spending habits are also to blame for the increase in claims filed. Before deciding to seek bankruptcy, you need to know the right information and what to expect; that way, you will make better decisions. This article can help you with that.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. Because of this, transferring the debt to your credit card is pointless.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Being honest is both the right thing to do and, moreover, it is required by law.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. You need not decide right away. So, this gives you plenty of time to consult with several attorneys.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. Laws are subject to change, and it’s important that you’re educating yourself about current code only. To find out about these changes, you can look at your state’s legislation website or contact their office.
Safeguard your most valuable asset–your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
It is imperative that you know for sure that bankruptcy is the option you need. Consolidation could be the avenue you need to get your finances back in order. The bankruptcy process takes forever to finish and is very nerve-wracking. It will also harm your ability to secure credit in years to come. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Keep in mind that missed payments will trigger dismissal of your case.
Spending time with the people you love is something you should do now. Going through a bankruptcy is never easy. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. It can be hard to face the world while the bankruptcy process is taking place. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Be sure you’re acting when the time is right. Timing can be critical when it comes to personal bankruptcy cases. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Speak with bankruptcy attorneys for a time frame for filing with your situation.
Keep the concept of shame out of your head if you are contemplating bankruptcy. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Feelings such as these are not of value to you and it is possible for them to be psychologically harmful. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Do a little bit of research into the regulations having to do with filing for bankruptcy before you begin the process. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. Some mistakes could lead to having your case dismissed. This is exactly why it’s imperative that you take the time necessary in order to research what you can about bankruptcy. This can save you a lot of time and make the entire process easier.
As you are no doubt aware, bankruptcy is much talked about in today’s economy. When deciding how to tackle your bankruptcy, make sure that you employ the advice that you read here.
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