Although it is sometimes needed, deciding to file for bankruptcy is hard. The more you educate and prepare yourself for the bankruptcy process, the better prepared you will be to handle it. Keep reading to learn some solid advice for navigating the treacherous world of bankruptcy.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Don’t feel bad if you need to remind your attorney about any specifics of your case. It is wrong to assume that your lawyer will remember every word you ever utter! This is your future in their hands, so don’t be scared to mention it.
Any bankruptcy consultation should be free of charge. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Only make your decision if all your questions and concerns are adequately addressed. It’s isn’t necessary to make a choice right away. You can take as much time as you need to meet with different lawyers.
See if there is an alternative you can use before declaring bankruptcy. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Chapter 7
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. Your ties with all creditors will get dissolved. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Take steps to ensure your home is protected. There are many options available to help protect you from losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Before you even consider filing for bankruptcy, familiarize yourself with the laws surrounding this process. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Moreover, a filer is prohibited from spending or incurring extra debt prior to their bankruptcy filing.
Financial Information
Make sure that you disclose every bit of financial information on your bankruptcy petition. If you do not complete your financial profile your case could be delayed or dismissed. It is better to have something on there that you are unsure about, rather than not include it at all and risk a dismissal. Financial information should include all income, assets and loans.
Gain an understanding of bankruptcy law before you file. The bankruptcy laws are complex, and things could go badly if even one thing is out of place. A variety of mistakes will lead to dismissal of your case. Before you begin bankruptcy proceedings, research as much as you can. The proceedings will be much smoother with this information.
You will want to retain a bankruptcy lawyer if you decide to file for personal bankruptcy. A specialized lawyer will advise you on what to do and help you out if you run into any issues when filing for bankruptcy. The lawyer you chose can take you through the paperwork step-by-step and resolve any questions about the process.
You may not want to delay your bankruptcy if you secure a higher-paying job just prior to filing. Bankruptcy may still be right for you. The timing of your bankruptcy is important. If the bankruptcy filing gets posted before the job begins, this added income will not be taken into account when determining how you will repay the money.
Sometimes declaring bankruptcy is simply the only viable option, even though it’s one that nobody wants to take. Having studied the information in this article, hopefully you are better prepared to deal with the bankruptcy process. Making time to educate yourself from anyone who has gone through this before can make your personal trip through this less stressful.
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