Bankruptcy: Everything You Need To Know Before You File
Bankruptcy is a decision and should be considered carefully before undertaking. Learn everything you can beforehand.
If this is your case, you should begin to investigate the legislation in your state. Each state has its own laws regarding personal bankruptcy. For instance, in some states you can keep your home and car, but not in others. You should be aware of local bankruptcy laws for your state before filing.
Don’t use a credit card to pay off your taxes if you’re going to file bankruptcy. In a lot of places, you cannot get this debt discharged, and you could be left owing a significant amount to the IRS. This means using a credit card is not necessary, since bankruptcy will discharge it.
One of the best ways to learn more about the bankruptcy process is to hit the Internet and look up reputable bankruptcy websites. Some valuable resources include the U.S. Dept of Justice and the American Bankruptcy Institute. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
Bankruptcy filings do not necessarily mean you’ll lose your home. You might be able to keep your home, for instance, such as your home decreasing in value or having a second mortgage. You are still going to want to check out the homestead exemption either way just in case.
Be sure that bankruptcy truly is your best option. You might be better off consolidating your debt may be simpler. It can be quite stressful to undergo the lengthy process of filing for bankruptcy. It will also limit your ability to secure credit in years to come. This is why you must ensure that bankruptcy is your last resort.
Chapter 13 Bankruptcy
Do not be afraid to remind your attorney of the important specifics of your case. Inaccurate or incomplete information can lead to your petition being denied. Speak up. This is your life, and your future depends on it.
Consider Chapter 13 bankruptcy is an option. If you have a regular source of income and less than $250,000, you may be able to file Chapter 13 bankruptcy. This lasts for three to five years and after this, in which you’ll be discharged from unsecured debt. Keep in mind that even missing one payment can be enough for your case.
Make sure you act at the appropriate time. Timing is very important when it comes to personal bankruptcy cases. For some people, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Speak to a bankruptcy lawyer to determine what the proper timing is for you to file bankruptcy.
It is possible for those going through the bankruptcy process to feel unworthy, remorseful, and embarrassed. These feelings can cause you to make rash decisions and provide no value.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. You should make a final decision only once all of the questions or concerns are sufficiently attended to. You don’t have to make your decision right after this consultation. You have lots of time for consulting with other lawyers.
Bankruptcy is a host of stress. To help yourself deal with this stressful situation, hire a good lawyer. Don’t let cost be the cheapest. It may be not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Make sure people who have experienced bankruptcy give your circle of friends and the BBB. You might want to visit a court hearing to see how an attorney handles his case.
Consider all available options prior to filing for personal bankruptcy. Credit counseling is an important option you should consider. There are non-profit organizations that may be able to help you. They will negotiate with your creditors in order to reduce your payments and your interest lowered as well. You can even pay your creditors.
This is considered fraud, and you may even be forced in paying all of it back to credit card companies.
Check into less drastic solutions prior to declaring bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. 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.
Be cautious if you pay your debts before you file for personal bankruptcy. You might be legally unable to file for bankruptcy if you were still paying your creditors ninety days ago, and a year for family members. Know the rules before you are going to do it.
Don’t put off handling the research or procedures for bankruptcy until you are in dire straits. It can be difficult to ask for help, but if you wait forever to act, you accrue more debt.
It is possible that bankruptcy is more beneficial to your credit than multiple overdue or missing payments. While bankruptcy will show up in your credit file for the next 10 years, you could surely try to fix your damaged credit. The whole point of bankruptcy is the chance at a new start.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 most of your outstanding accounts will essentially be erased. You will no longer be liable for any money that you owe to your creditors. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you and your financial situation.
Debts that you leave out of your filing paperwork won’t be discharged.
Some lawyers have a phone line so creditors may be referred there when they make attempts to contact you about your delinquent accounts. This will prevent them from calling you again.
As is evident from the information you just read, the bankruptcy process takes time. There are a lot of things that need to be done and done correctly. By taking what you have learned here and applying it, the process of bankruptcy will be much smoother.
Make sure your home is safe. Filing for bankruptcy doesn’t automatically involve losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.