Even people who have had assets, such as a car, seized for back tax debt can file for bankruptcy. Your credibility with lenders will take a beating, but sometimes bankruptcy is the only thing you can do. Continue reading this article to understand what you need to know about bankruptcy and the likely end result of going through one.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If this is your case, you should do some research about bankruptcy laws in your state. Laws differ from one state to the other. For instance, in some states you can keep your home and car, while other states prohibit this. You should be aware of local bankruptcy laws before filing.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The United States Department of Justice, NACBA, and American Bankruptcy Institute websites are all great places to go for up-to-date information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Retirement accounts should never be accessed unless all other options have been exhausted. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Do not be afraid to remind your attorney of important specifics of your case. Lawyers are people too, and sometimes they forget important information and need to be reminded. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Prized Possessions
Find out what you exemptions are prior to filing bankruptcy. Bankruptcy exemptions are properties may not be seized during bankruptcy. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
It is possible to keep your home. Filing for bankruptcy doesn’t automatically involve losing your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Spend time researching the advantages and disadvantages of filing for each one of these. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Repayment Plan
Make sure bankruptcy is truely your only option before filing. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. Loan modification plans can be helpful for those facing foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Find ways to relax while you go through the process of filing for bankruptcy. Filing is the most intensive step in the process, so afterwards it’s important to let go of some of your stress. This stress could actually cause depression, if you don’t combat it. Once your petition is in the hands of the judge, all you can do is wait.
Before you file your petition, be sure that you understand personal bankruptcy rules. There are many traps in the bankruptcy laws that could trip up your case. You might find that your case become dismissed because of a mistake. Before you begin bankruptcy proceedings, research as much as you can. This will help your process go smoother.
As you can see by now, you do have the option of filing bankruptcy. Nonetheless, you should remember the negative impact filing for bankruptcy will have on your credit rating. For this reason, filing for personal bankruptcy should be your last resort. Staying informed on how to manage this situation could prevent you from experiencing headaches and it can also help you keep your valuables.
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