If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Unless there is no other choice a retirement account should not be used. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
It can be a difficult process to file for bankruptcy. There are different chapters of bankruptcy, and you may qualify for one or more. Therefore, it is essential that you learn about bankruptcy prior to petitioning the courts for bankruptcy protection. In the following paragraphs, you’ll find some tips that will get you off to a good start.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Have a good look around the Internet to see what information is relevant to you regarding bankruptcy. The United States Department of Justice and American Bankruptcy Institute are two such places to look. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. If the tax can be discharged, so can the debt. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. Perhaps just consolidating some of your existing debt, could make them easier to manage. The bankruptcy process takes forever to finish and is very nerve-wracking. Your future credit will be affected by these actions. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.
Consider every option prior to filing for bankruptcy. Have you been through credit counseling first? There are various non-profit companies that may be able to help you. These companies work with creditors to reduce your payments and interest. You make payments to them and they pay your creditors.
Do not be afraid to remind your attorney of important specifics of your case. Do not assume that if you’ve already told him or her something important once, that they will remember it later without a reminder. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Be cautious if you are planning to pay off any of your debts before you file 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. Do your research rather than making financial decisions blindly.
Seek a less serious option prior to filing for bankruptcy. For example, if your debt is small, try a type of consumer counseling program. 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.
Before you decide to file bankruptcy, you should think of ways to become more financially responsible. In other words, you do not want to waste your efforts here by starting to ring up more and more debt. In the course of a personal bankruptcy filing, your creditors and the court will examine your credit history right up to the filing date. Show that you are making a positive change to your current financial situation.
If you think you have to file a petition for bankruptcy, get a lawyer who specializes in bankruptcy. A legal professional can help quell any confusion you have about the process. You lawyer can also help you fill out and file paperwork and answer all your questions.
Consider Chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. However, if you were to miss a payment, the court would dismiss your case right away.
When you file for bankruptcy, you need to list every single debt that you want wiped out. Debts that you neglect to include in your paperwork won’t be discharged. You should have everything in writing with dates and signatures to prove that your debts have been discharged, or you could be asked to pay these debts.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.
You can always refile for bankruptcy if your case is dismissed. However, be aware that the normal stay after a dismissal is 30 days after filing. It may be possible for you to get an extension if you have the right documentation and reasoning behind any errors you committed.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. There will, however, be obstacles. You will be required to meet a trustee and be approved for a new loan. Present a planned budget that shows how you can take on the loan payment and stay current. Also, be sure you can provide an explanation as to why this purchase is necessary.
Choose a highly-rated bankruptcy lawyer that practices close to your home. Find out if the attorney you are interested in offers a free consultation. If so, gather your financial statements, then go see them. A good lawyer can review the whole process with you and can help you understand what to expect.
Be decisive at the correct moment in time. The timing of your filing could be important to its success. While there are times that it is ideal to file soon, there are other times in which you should wait. Speak with bankruptcy attorneys for a time frame for filing with your situation.
You need to look over all your bankruptcy options and choose the best one for you. There are several forms of bankruptcy. Take some time to research the different types to learn which category you fall under. Think about the advantages and disadvantages of each type and get a professional opinion before deciding for sure.
Obviously you see the necessity for proper planning and decision-making in before you file. Should you determine that it is a wise move considering your personal circumstances, you need to consult with a lawyer who has handled many other bankruptcy cases.
You don’t always walk away from all of your debts without having to repay anything when you file bankruptcy. In some cases, if chapter 13 bankruptcy is what you file for, your debts will be restructured instead. This ensures that creditors still get some of what they’re owed. Some individuals shy away from filing for bankruptcy, feeling it would be irresponsible not to pay off their debts. Chapter 13 makes it possible for people to recover from overwhelming debts while paying a portion of the debt they owe to their creditors.