Advice On People Considering Filing Personal Bankruptcy

Bankruptcy is a huge financial decision and should be considered carefully before undertaking.Learn everything you can beforehand.Do not even think about paying your taxes with credit cards that will be canceled when you file for bankruptcy. In most states, this debt will not be dischargeable, and you may still owe money to the IRS. This makes using a credit care irrelevant, when it will just be discharged.You should not use your IRA or 401(k) unless there is nothing else you can do. You may need to withdraw some funds from your savings account, but try to leave yourself some financial security for the future.The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you find yourself going through this, you should know all about the laws that are in your state. Each state has its own set of rules regarding bankruptcy. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. Know what the laws are in your state before filing.Be certain to speak with an attorney, not their paralegal or law clerk, instead of a paralegal or assistant; those people aren’t allowed to give legal advice.Filing bankruptcy does not necessarily mean you have to lose your home. Depending on certain conditions, you might be able to keep it. You are still going to want to check out the homestead exemption because it may allow you to keep your home.

Understand the differences between Chapter 7 and a Chapter 13 bankruptcy. Take the time to learn about them extensively, and look at the advantages and disadvantages of each.If there is anything that you don’t understand, go over it again with your attorney before making the final filing decision.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. Unless there are no other options, your retirement funds should never be touched. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.Be certain that bankruptcy really is your best option. It may be that all you really need to do is consolidate some of your debt instead. It can be quite stressful to undergo the lengthy process to file for personal bankruptcy. It will also limit your future credit in the future. This is why you explore your other debt relief options first.Don’t file bankruptcy the income that you can afford to pay your bills. Bankruptcy may appear like the easier way to avoid paying your old bills, but it will devastate your credit for the next ten years.As you can see from the above article, bankruptcy doesn’t just happen. There are quite a few things you you need to do and do correctly. Keep this article’s advice in mind and you will probably stand a better chance of laying all the groundwork for your own bankruptcy properly.It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.

Updated: November 27, 2019 — 5:06 am