Common emotions experienced by people going through bankruptcy are sadness, frustration, and anger. Those who experience it are stuck worrying about how they can pay their debts while being able to live day to day, or so they think. Even if you file for bankruptcy you still have options available to you. Read on to learn more.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this sounds like you, start familiarizing yourself with your state laws. Each state has its own set of rules regarding bankruptcy. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Do not file before learning about the bankruptcy laws in your state.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
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. Retirement accounts should never be accessed unless all other options have been exhausted. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
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 a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 involves the elimination of all of your debt. You will no longer be liable for any money that you owe to your creditors. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
It’s a good idea to meet with a number of bankruptcy lawyers before settling upon one. The majority of them offer free initial consultations. Ask to speak with the licensed attorney and not a representative, who can not offer legitimate legal counsel. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Take time to research this online and see the pros and cons for filing each one. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. In many cases, Chapter 7 bankruptcy can lower your payments. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
File at exactly the right time to maximize the effect of your bankruptcy. Timing is very important when it comes to personal bankruptcy filings. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
After reading this article, you should be able to see that personal bankruptcy isn’t so bad. It can be disturbing at first, but it is possible to overcome bankruptcy. Remember these tips so you can dig your way out of debt.
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