The process of filing for bankruptcy can bring both stress and relief into your life. You do have to sort through all of your finances and interact with a lot of people in the financial part of your life. The relief is that your phone will stop ringing with harassing phone calls from debt collectors, and you can begin to rebuild your credit. The following are some useful ideas for facilitating a smooth bankruptcy.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you are in this position, you need to be familiar with the laws in your area. Laws differ from one state to the other. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Know what the laws are in your state before filing.
Credit Cards
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. If this happens, instead you should turn your attention to secured credit cards. This will prove that you want to improve your credit score. It will take time, but when creditors see a pattern that satisfies their need to see your good faith with payments, you will then be able to apply for unsecured cards.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Choose to file only if your lawyer has convinced you that this is the best decision. You don’t need to decide what to do right away. If you’re unsure, don’t hesitate to talk to multiple bankruptcy lawyers.
Hire a lawyer if you plan on filing for bankruptcy. You may not know everything you need to know in order to have a successful outcome of your case. A personal bankruptcy attorney can help and guide you along through the bankruptcy process.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
When you file for bankruptcy, you should be very aware of your rights. Bill collectors will lie to you and say you can’t have their bill discharged. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Before you decide to file, make yourself aware of the laws about bankruptcy. For instance, somebody cannot transfer assets from a filer’s name up to a year after they file. It’s also prohibted to run up debt on credit cards just prior to filing.
Create a list of all of your finances before filing for bankruptcy. If you leave off even one tiny detail, you may end up in some serious trouble, but at the least your claim will be denied. No sum is too small to be included; err on the side of caution and include everything. This includes any jobs you have on the side, any vehicles you have and any outstanding loans.
Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. This could be considered as fraud, and you may even be forced in paying all of it back to credit card companies.
It is important not to delay the process of determining whether or not you should file for bankruptcy. It can be difficult to ask for help, but as you wait, you accrue more debt. If you are not sure, gather all of your information and spend a little time speaking with a bankruptcy attorney; their experience can help you make the right decision.
There are benefits and detriments to filing bankruptcy. Regardless of your reasons for filing for personal bankruptcy, remember that it is a process that can be extremely helpful if you are well informed. The tips laid out here will help you cope with bankruptcy in an easier manner. Make good use of these tips. You will be glad you did.
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