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Before You File – Everything You Need To Know About Bankruptcy

If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. If the tax can be discharged, so can the debt. This makes using a credit care irrelevant, since bankruptcy will discharge it.

TIP! Think through your decision to file for bankruptcy carefully before going ahead with it. You have better options.

If you are overwhelmed by debt, it can be a very frightening experience. Sometimes, it just snowballs from having a little bit of a financial issue to losing complete control in a short amount of time. Unfortunately, this problem is difficult to fix, once you realize you have it. The following article will give you some pointers on what to do regarding bankruptcy if you are way over your head in debt.

If you are considering filing for bankruptcy you definitely need to hire an attorney. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.

TIP! Learn of new laws prior to deciding to file for bankruptcy. Bankruptcy laws change a lot and before making the decision to file, you need to know what you are getting yourself into.

Determine which assets won’t be seized before filing for bankruptcy. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. Be well prepared for bankruptcy by reviewing this list. It will tell you whether are not the things you value most are subject to seizure. If you aren’t aware of this, you could lose some assets that you value.

Weigh all of your options before declaring bankruptcy. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.

TIP! It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Talk to the lawyer and not his assistant, who may not be legally able to help you.

Keep with what you have decided to do. You might even be able to get back secured property that has been repossessed in the 90 days before filing. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.

Do not forget to make quality time for friends and family members. The process of bankruptcy can seem brutal. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. It is not uncommon for a person to feel the need to pull away from loved ones during the process. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.

Chapter 7

File for bankruptcy before your finances get completely out of control. Many people simply try to ignore their financial troubles, hoping that they will somehow go away, but this is a huge mistake. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. Once you realize that the debt you have is too much for you to handle, start thinking about talking to a bankruptcy attorney, they can guide you throughout the entire process.

TIP! When filing for bankruptcy, list all of your financial information. If you do not do so accurately, your petition could be dismissed, or at the very least delayed.

The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. All debt will be eliminated with Chapter 7. All the things that tie you to creditors will go away. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. Both options have advantages and drawbacks, so do your research before deciding.

Look into other options before deciding to file for bankruptcy. One of these choices is consumer credit counseling. There are many non-profit debt counseling services available. Their job is to lower your payments and interest through negotiations with your creditors. They collect payments from your and then pay the creditors.

TIP! Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. Not only is this fraud, but you could still be liable to repay the money at the end of the day.

It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.

After filing bankruptcy, many people refuse to use credit cards or get loans. However, building a good credit history requires that you occasionally use credit. If you never use credit, you won’t be able to rebuild the good credit that you will need to make future purchases. Start with one credit card to get your credit going in the right direction.

TIP! Make a list of all your debts. This will be the basis for your bankruptcy filing, so make sure you include all the debts you are aware of.

Filing for bankruptcy is not recommended when you have income more than your debts. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.

Remember to include all the debt that you want to eliminate when you file your bankruptcy papers. Debts that you neglect to include in your paperwork won’t be discharged. It is solely your responsibility to ensure all important information is documented. Doing so can help you make sure you don’t end up paying debts that should have been discharged.

TIP! If you realize that you do not qualify when it comes to the Homestead Exemption when you file for chapter 7 bankruptcy, then you might be able to use chapter 13 bankruptcy when it comes to your mortgage. Sometimes the best thing to do is completely convert your Chapter 7 bankruptcy case to a Chapter 13 bankruptcy case.

Do not use the word “shame”, if you go bankrupt. Going through bankruptcy can cause you to lose a lot of self-esteem. Learn to accept these feeling at face value– you can’t prevent yourself from feeling them, but you can stop them from controlling you. Having the right outlook during a tough financial upheaval is a great attitude in coping with bankruptcy.

Before you file for personal bankruptcy, check to make sure that all your problem debts will be cleared by bankruptcy. Some debt, such as student loans, will remain on your credit history regardless of if you file. This kind of debt is best tackled through a loan consolidation company or an agency that specializes in credit repair.

TIP! You may have your case dismissed because of errors. Normally you can re-file in this case.

It is important to not wait for the final minute to petition for bankruptcy. It is quite common for people to linger on hoping that their financial difficulties will somehow resolve; however, this very rarely happens. If debts are not dealt with quickly, things can quickly get out of control. Not only will you be faced with late fees and interest, but you may also be faced with a wage garnishment or foreclosure if you ignore your financial woes. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.

When you are going to file for bankruptcy, never lie or hide anything. Any attempt to hide something from the court could cause your petition to be turned down immediately. All of your income and assets that are relevant to the bankruptcy case need to be put forward. This can show the court that you have good intentions and can definitely help them rule properly in the proceeding.

TIP! You might find it hard to file successfully for bankruptcy, if your primary debt issue are your student loans. The majority of states have very tough laws in regards to discharging student loan debt.

Do your homework so you thoroughly understand the laws pertaining to bankruptcy before you file. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. Also, it is illegal to load up your credit cards with debt right before filing occurs.

Do your research first. If you plan to file for bankruptcy and cannot afford an attorney, you might think about representing yourself. If this is the case, take your time and prepare very thoroughly. People who file on their own tend to make mistakes that have a negative impact on the outcome. Be sure everything is done right to avoid that.

TIP! Be candid with your lawyer and include all of your financial information in your court filings. Although this would mean that you would be telling him information regarding credit card companies, lenders and hospitals, it also means that you would tell him any information about you owing money to friends and families.

Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Even if you think a sum is insignificant, add it into your documentation. Anything, like a job on the side, assets, like cars, and any outstanding loans should be included.

Stay in touch with your attorney so you know what he or she is doing regarding your bankruptcy. It is important to know the status of your case and you should not be hesitant to ask questions. Law firms are busy, and an overworked lawyer or paralegal might make an error on your paperwork. Despite popular belief, lawyers are only human.

TIP! If you are intending to file for bankruptcy, remember that you must not transfer money or other assets to another person within the year preceding year filing. This is an obvious ploy to hide your assets.

Go over the debts you are currently paying off before filing for bankruptcy. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Know the laws prior to deciding what you are going to do.

Carefully consider which type of bankruptcy is right for you. There are a few types of bankruptcy. Become very familiar with each type of bankruptcy, and the benefits of each, before you choose which type to file. Weight the positives and negatives of each one, along with getting a second opinion from a financial pro before choosing one.


If you believe that bankruptcy proceedings may be the answer to your financial woes, you should make haste to learn about the process. While it may be difficult to accept that you are in trouble, waiting only prolongs the agony. Take responsibility to talk with a bankruptcy expert sooner, rather than later. The longer you wait, the more difficult the situation can become.


There are often times when you feel that you have very little control over what is happening to you. This article should have been instrumental in helping you figure out what to do next for your financial path. Apply the tips you learned from this article into your life.

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