It can be a difficult process to file for personal bankruptcy. There are multiple ways you can file for bankruptcy, and the kind you select depends on your individual financial picture and what types of debt you have. This article will help you some of the important facts about personal bankruptcy.
Always be honest and forthright when it comes to your finances.
Chapter 7
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. This means using a credit card is not necessary, when it will just be discharged.
Be certain that you know how Chapter 7 and Chapter 13 bankruptcy. Chapter 7 eliminates all outstanding debts. Your former ties with all creditors will cease to exist. Chapter 13 bankruptcy allows for a five year repayment plan that takes 60 months to work with until the debts go away.
Consider filing for Chapter 13 bankruptcy is an option.If your total debt is under $250,000 and have a consistent income source, you may be able to file Chapter 13 bankruptcy. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that even missing one payment can be enough for your case.
Look into all of your options before filing. Loan modification plans on home loans are a great example of foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, change the loan term or reduce interest as ways of assisting you. When push comes to shove, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Don’t touch retirement accounts unless you don’t have a choice. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
In order for this to be considered, you must have bought your car in excess of 910 days before filing, have a higher interest loan for it as well as a consistent work history.
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, such as family members or business partners. However, if you had a co-debtor, which spell financial disaster for them.
Make sure you are acting at an appropriate time.Timing can be critical when it comes to personal bankruptcy filings. Sometimes, filing as soon as you can is best, while other times, you should wait until the worst is over. Speak with a bankruptcy lawyer about when the ideal timing is for your specific needs.
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. Speak up if something is troubling you, as this is your future we are talking about here.
Make a list of financial information on your bankruptcy petition. If you forget to add these, your petition could be denied. This includes income from second or part time jobs, any vehicles you have and any outstanding loans.
This could be considered as fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
Don’t drag your feet figuring out if bankruptcy is something you must do. Although it may be tough to admit you are in financial trouble, it will be much harder to continue spiraling into a debt quagmire.
After a bankruptcy, you may not be able to receive any credit cards. If you are in this situation, applying for a secured card may be the answer. This demonstrates to creditors that you are making a good faith effort to repair your credit. After a time, you are going to be able to have unsecured credit cards too.
Just because you file for bankruptcy will not follow that you are going to have to give up everything you own. You get to keep some personal property. Some included items are: electronics, furniture, clothing and even jewelry. This will all depend on the type of bankruptcy you choose, the type of bankruptcy you file for, and your state’s laws, but you could hold onto your large assets like the car and the family home.
This article has hopefully made it clear that declaring bankruptcy is a big decision that should be considered at length. If it seems to make sense in light of your financial problems, you should seek an experienced bankruptcy attorney who can guide you toward a fresh, clean start!