Most people end up filing for personal bankruptcy because they owe more than they make. Study the laws in you state to learn what you need to do and what your options are. Bankruptcy laws vary from state to state so it is important to do your research. Some states protect your home, and others do not. Become acquainted with local bankruptcy laws before filing.
Being in debt is far from fun, and it is even downright scary at times. In a quick amount of time, you can go from being in a tiny bit of debt to a situation that suddenly spirals out of control. Unfortunately, this problem is difficult to fix, once you realize you have it. This article can help you learn what to do when filing for bankruptcy when too much debt is hanging over your head.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. If the tax can be discharged, so can the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Interviewing multiple attorneys is a good way to find the best fit.
Be sure to weigh all of your options before deciding to file for personal bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Do not forget to be around those you love. The process for bankruptcy can be hard. It is long, hard and sometimes leaves people feeling guilty or ashamed. A lot of folks decide to hide themselves from the world around them until the end of the process. But, isolating yourself from others could bring out more depression. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Don’t let shame consume you during the bankruptcy process. Going through bankruptcy can cause you to lose a lot of self-esteem. But, there is nothing positive about feeling this way and it can actually affect your mental state. Keep a positive state of mind to deal with your tough financial situation.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. All debt will be eliminated with Chapter 7. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Know the rules of personal bankruptcy prior to petitioning. If you do not file for bankruptcy properly, you might run into a lot of different issues. If you do not know bankruptcy law, your bankruptcy case could be dismissed. Do as much research as possible about bankruptcy before you file. This will make things a lot more simple in the long term.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
A few months after bankruptcy is complete, get your credit report copies from the 3 credit reporting agencies. Check to make sure your credit report accurately reflects your recently discharged debts. Question and clear up problems and discrepancies immediately, so that your credit record can start improving quickly.
Research Chapter 13 bankruptcy, and see if it might be right for you. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. However, if you were to miss a payment, the court would dismiss your case right away.
Resist the temptation to be dishonest when filing for bankruptcy. Lying about assets or debt is a bad idea in this situation. It’s also illegal. You can end up in jail for a while if you don’t properly record your assets and debts.
Don’t hide from your friends and family while you go through bankruptcy. Filing for bankruptcy is a difficult process. It is long, hard and sometimes leaves people feeling guilty or ashamed. Lots of people think they need to hide from everyone until this is all done. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
There are others online who have had to file bankruptcy just like you, so seek them out and talk with them if you start feeling low over your situation. Filing for bankruptcy can make you feel extremely alienated, even from your close friends. The silver lining here is that you can find many people who are sharing in your struggle. Take online support groups, for example. You can speak to real people who know exactly what you’re going through.
An understanding of your rights is important before filing for bankruptcy. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. There are few debts that can’t be discharged. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Don’t automatically assume that a Chapter 7 bankruptcy will discharge all of your debt. There are secured debts that must be reaffirmed, meaning you must draw up a new payment agreement. Other debts cannot be discharged at all. For instance, child support, court-sanctioned fines and alimony cannot be discharged in a Chapter 7 bankruptcy.
Go ahead and file for personal bankruptcy as soon as you realize it is necessary. Some people just ignore the trouble they are in financially and think it will go away later. This is not a good decision. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. As soon as you find yourself experiencing financial problems, take action and discuss your options with a bankruptcy attorney.
When you have reviewed all of your options and found that bankruptcy is the only viable one, be sure to find out everything there is to know about bankruptcy laws in your state. Remember that the future of your family could depend on this decision; get help from a specialized lawyer to go through this procedure as smoothly as possible.
Make sure you are completely aware of bankruptcy laws before you consider filing. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. It is also illegal for someone who files for bankruptcy to drastically increase their debts on credit cards immediately before filing.
After your bankruptcy goes through, avoid taking on new debt. It is quite normal for those making a fresh financial start to be targeted by credit card lenders. Read the fine print, the interest rates are likely outrageous. If you act hastily, you may end up with even more debt. It’s better to live within your means, establish a savings account and slowly build good credit for a sound financial future.
Sometimes you get overwhelmed with life and you feel as if there’s nothing that you can do about it. This guide has given you great pointers on the things that you could do to have control over your finances as you face bankruptcy. Having this information can change the way you face this challenge.
If you are thinking about bankruptcy, stop charging your credit cards and borrowing money. You may feel that before filing for bankruptcy you should run out to buy many things beforehand. Doing so will not help you in the eyes of the legal system. Now is the time when you need to become financially responsible. You’re going to need to practice better habits to avoid filing again in the future, so you might as well start now.