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Understanding Why Bankruptcy Is Not The End Of The World

Be certain to gain a thorough understanding of personal bankruptcy by using online resources. The United States D.O.J., the A.B.I and the N.A.C.B.A. are all useful organizations willing to provide educational material. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.

TIP! If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS.

Filing for bankruptcy will be a very crucial decision, so don’t take it lightly. Read through the information in this article and use it to help you make an informed decision. Then, you can make a decision based on what you learn.

Before undertaking the bankruptcy process, ensure you have made the correct decision. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.

TIP! After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. If this happens, instead you should turn your attention to secured credit cards.

Ask yourself if filing for bankruptcy is the right thing to do. Alternatives do exist, including consumer credit counseling. 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.

Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. 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. While it might not be possible to protect a particularly beloved possession, at least you will know in advance whether or not you risk losing it.

TIP! Never pay for a consult with a bankruptcy lawyer, and ask plenty of questions. Most lawyers offer free consultations, so consult with a few before settling on one.

Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. It is important that you are completely transparent, showing everything financial that needs to be known. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.

It is important to know how Chapter 7 filings differ from Chapter 13 filings. Take the time to find out about each one online, and look at the advantages and disadvantages of each. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.

TIP! You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. There are extra hoops to jump through.

Never pay to have a consultation with a lawyer, and ask a lot of questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. After your consultations, do some additional research on each attorney you consider qualified for the job.

Understand the rights you have as a bankruptcy filer. Some debtors will try to tell you your debt with them can not be bankrupted. There are few debts that can’t be discharged. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.

Bankruptcy Laws

Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. Bankruptcy can sometimes leave people feeling guilty, ashamed and alone. Do not let these negative feelings influence your decision. Focusing on the positive during this stressful time is a good strategy for coping with your ordeal.

TIP! Filing for bankruptcy can cause stress. Look for a good attorney who can help you through the process.

Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.

Consider every option prior to filing for bankruptcy. You might want to look into the possibility of credit counseling instead. May non-profit companies are available to help you. They can speak with your creditor about getting your payments and interest reduced. They pay your debts and you repay them.

TIP! Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. This could be considered as fraud, and you may even be forced in paying all of it back to credit card companies.

Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. All creditor relationships will be severed. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. To make the wisest choice, you will need to understand the consequences of each of these two options.

Do not take too long deciding that it is time to declare bankruptcy. It can be hard to ask for help but it’s not recommended for you to get further into debt. By consulting a professional, you will be able to get the advice that you need before everything gets too complicated.

Unsecured Debts

Choose a bankruptcy attorney carefully. You do not want to hire someone who is new to the field of bankruptcy. Before hiring a lawyer, make sure he or she is licensed and experienced. By researching online you can check out a lawyer’s credentials, as well as customer reviews and any disciplinary action against him or her.

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. Your attorney should be able to tell you whether it is advantageous for you to convert your Chapter 7 filing into a Chapter 13.

Chapter 13 bankruptcy might be a good option, so don’t overlook it. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.

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. If it has a bearing on your case, then all assets and income must be declared. This shows the court that you are doing your best to resolve your situation, and helps them expedite your proceeding.

TIP! You need to tell your bankruptcy attorney about all of your financial obligations, even small ones. You probably know that you need to disclose consumer debt and medical debt, but you might not realize this means you need to disclose any debt you owe individuals, as well, even family.

Investigate other alternatives before resorting to bankruptcy. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If a foreclosure is on your horizon, look into loan modification plans. There are many ways in which a lender can make adjustments that will be helpful to you. Among them are extending the loan, forgiving late charges and reducing the interest rate. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.

A full year prior to filing a bankruptcy claim, you need to ensure that you don’t attempt to transfer your assets to another person or entity. Such an obvious attempt to shield assents can cause your application for bankruptcy to be rejected. Depending on what the asset is, it might be safe, anyway. If you have transferred assets recently for legitimate reasons, you will have to wait the required time period before filing for bankruptcy. Attempting to hide assets from the bankruptcy court can only backfire.

TIP! Put your credit cards away if you are contemplating bankruptcy in the near future. Buying lots of stuff may seem okay, since the debt is going to be wiped out anyway, but courts aren’t very keen on that sort of behavior.

Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. A lot of the time you can lower payments by filing for Chapter 7 bankruptcy. The vehicle must have been obtained more than 90 days before filing and be a loan with high interest. You must also have consistent work history.

If you are upset and overwhelmed from so many calls from harassing creditors, filing for bankruptcy can stop that behavior right away. Being unable to support yourself and pay your bills is never a good feeling. Bankruptcy protection can give you room to breathe while you figure things out.

TIP! When filing for bankruptcy it is not always the case that all debts will be discharged. If you file chapter 13, this allows you to restructure your debts so that creditors get a portion of what you owe them.

See to it that you are aware of the laws concerning bankruptcy before you consider filing. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Maxing out your credit cards immediately before filing is also illegal.

Ensure that bankruptcy is your last option to avoid tarnishing your credit record. Most companies will settle your debt for much less, or work with you to find a payment plan you can afford. This can be a big boost to your credit rating, and it can save you money. You might also consider consolidating all your debts into one loan.


Before petitioning, you need to know what the personal bankruptcy rules are first. You want to understand what is going to happen when you file for your specific case. It is even possible for your whole petition to be thrown out of court due to errors being made. Make sure you have a decent understanding of the bankruptcy process before you proceed. This will ensure your bankruptcy will go smoothly.


Bankruptcy isn’t simple and immediate. There are quite a few things you you need to do and do correctly. If you follow the advice given here, you’ll be able to make sure you have everything in order for when you file bankruptcy.

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