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Personal Bankruptcy: Is It The Right Choice For You?

Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If this sounds familiar, you should read up on the bankruptcy laws in your state. When it comes to bankruptcy, states have varying laws. For instance, in some states you can keep your home and car, while other states prohibit this. Be sure you educate yourself on local laws prior to filing.

TIP! Ask yourself if filing for bankruptcy is truly your best option. Alternatives do exist, including consumer credit counseling.

Bankruptcy can be both a relief and a stressful situation. For one thing, you need to examine your entire financial life and accept a lot of other people doing the same thing. On the other, however, after the bankruptcy has been discharged, you can get a fresh start and begin to re-build your credit. This article will give you some great tips to help ease the bankruptcy process.

Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If you find yourself in this situation, you may want to think about getting a secured card or two. You can exhibit your desire to rebuild your credit this way. In time, it may be possible for you to obtain unsecured cards.

TIP! It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end.

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. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. If the tax can be discharged, so can the debt. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.

Before declaring bankruptcy, ensure that all other options have been considered. 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.

TIP! If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. There are extra hoops to jump through.

Ask yourself if filing for bankruptcy is the right thing to do. There are other options available, such as credit counseling for consumers. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.

Do not wait until things go from bad to worse before filing bankruptcy. The judge reviewing your petition will consider your recent behavior, purchases, income and payments when making a decision. Debt can snowball very fast, and by ignoring it, you increase the chances of worse problems, such as foreclosure and wage garnishments. Speak with a bankruptcy lawyer as soon as you become aware that you cannot handle your debts.

TIP! Know the rules of personal bankruptcy prior to petitioning. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues.

If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Avoid ever touching retirement funds until you have no other choice. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.

Think before you pay debts after you’ve decided to file. Check the bankruptcy laws in your state to make sure you have not done anything in the past year to make yourself ineligible to petition for bankruptcy. Do your research and figure out the laws for you.

TIP! Realize that bankruptcy, ultimately, might be better for your credit than continuing to make late payments or miss payments on your debt. While bankruptcy will show up in you credit file for the next 10 years, you can begin the process of making your credit situation better right away.

Do not be afraid to remind your attorney of important specifics of your case. Don’t just assume that the attorney will remember it automatically. Speak up if something is troubling you, as this is your future we are talking about here.

It is not uncommon for people to declare that they will never again use credit cards after they declare bankruptcy. In reality, though, credit cards can be a useful tool for people who are looking to rebuild their credit score after bankruptcy. Failing to build an acceptable credit rating can prevent you from obtaining financing for a car or home at a later date. Start by using just one credit card, and propel your credit in a positive direction.

TIP! Pick you bankruptcy attorney judiciously. This type of legislation is popular for the inexperienced.

Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. The person you choose to file with needs to know both the good and bad aspects of your finances. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.

If you pick up a new job shortly before you file for bankruptcy, don’t slow down your filing plans! Bankruptcy could still be your best option. The timing of your bankruptcy is important. If you file before the new employment commences, your repayment options will be considered without this new wage figure being taken into consideration.

Personal Bankruptcy

When choosing an attorney you must ensure that the one selected is experienced in this field. Do not feel pressured to hire the first lawyer to speak to regarding your bankruptcy. And make sure that you do not always go cheap, hire a quality lawyer, they may be better suited to help you.

TIP! If your finances have got you feeling blue, hit up an internet chat room and speak with others who have dealt with the bankruptcy process. Going through bankruptcy is extremely stressful.

Be sure to hire an attorney before you embark upon filing for personal bankruptcy. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. A personal bankruptcy lawyer will be able to help you and ensure you are doing things the proper way.

You can always refile for bankruptcy if your case is dismissed. But, generally speaking, the automatic stay will apply for 30 days only if you have already received a prior dismissal. You might be able to push the case off for a bit if the judge sees good cause in the error you made and sees that you refiled.

TIP! Check over everything for accuracy. Even though you might have a lawyer fill out your paperwork and file it, you are personally responsible for making certain that all information within the documents are accurate.

Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.

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. Your future financial well-being lies in the balance, and therefore learning as much as you can and remaining involved in the process is a great way to boost your chances of getting a positive outcome.

TIP! Educate yourself well enough to ask your attorney informed questions about filing bankruptcy. Lawyers charge a lot for their time.

Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Searching for the best lawyer will help you located the comfort you need during this time.

Look for an attorney that carries a strong reputation. Once you have nailed one down, inquire as to whether they provide a free consultation. If it is, get your financial documents together and go visit the lawyer. A qualified attorney can help you understand the bankruptcy process.

TIP! You may want to see if there is a second job available. Instead of filing for bankruptcy, talk to all of your debtors and tell them that you are making efforts to pay their money back but that you need time to do so.

Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.

Depending on your personal situation, you’ll need to choose the right bankruptcy type. There is more than one type of bankruptcy. It is necessary to understand the different types of bankruptcy available. Find out what positive and negative consequences each type will bring, and consult a bankruptcy lawyer to make sure your decision is correct.

Chapter 13

To rebuild your credit after filing for bankruptcy, try opening new credit lines. That can be hard with poor credit, but a viable option is a secured credit card. These cards function like a credit card but you use your own money to back up the debt. If you continue to pay on time, then after a while the credit card company may give you an unsecured line of credit. If you pay off your new credit line faithfully each month, you will find that you become eligible for other credit at better rates.


Consider Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Consider that if you even miss one payment, your case will not be considered by the court.


Bankruptcy is both a good and a bad thing; it depends on perspective. Just know that what you learn today is going to help you out a lot in learning about bankruptcy. These tips can make dealing with bankruptcy easier. Using these tips in the process of filing can make you feel much better.

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