Although bankruptcy causes stress, it can help financially. On one side, you will need to handle a lot of people looking into your personal finances. Then again, after your debts have been discharged, you can begin rebuilding finances and stopping those calls from bill collectors. If you would like to make filing for personal bankruptcy much easier, simply follow the steps we present here.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If this is happening to you, then learn about the laws where you live. Different states have different laws regarding bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Ask yourself if filing for bankruptcy is the right thing to do. You can find services like counseling for credit that consumers can use. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. 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.
Do not hesitate to remind your lawyer of any details regarding your case. Just because you have told him something of importance that he will remember it. This is your bankruptcy and your future, so never be nervous about speaking your mind.
Getting unsecured credit post-bankruptcy will likely be difficult. Secured cards can be a great way to get started if this happens to you. This at least shows you are making an honest attempt at reestablishing your credit worthiness. Unsecured credit may be offered to you quicker than you think after doing so.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers offer free consultations, so talk to a few before making your decision. Only choose an attorney once all your concerns are answered to your satisfaction. It is not necessary to decide immediately after your consultation. This will give you extra time to interview several attorneys.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Don’t automatically assume that bankruptcy is your only option. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. Loan modification can help you get out of foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
It is important to remind your lawyer of any details that may be important to your case. Don’t assume that he will remember something you told him weeks ago. This is your bankruptcy case, so do not be afraid to remind your lawyer of any key facts.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. It’s a bit more difficult, though. Your trustee must approve any new loans such as this. Document your budget to prove that you’re going to be able to make the payments. You will always have to let them know why this item needs to be purchased.
Before you file, make sure you understand the laws as much as possible. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. It’s also prohibted to run up debt on credit cards just prior to filing.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. There are some assets that cannot be seized through bankruptcy, and the law lists those assets. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you fail to do so, things could get ugly.
Make sure you know what you should be doing when you file for bankruptcy. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. Some mistakes in your papers can cause your case to be dismissed. Before continuing, research personal bankruptcy. If you take care of this now, you can avoid problems going forward.
Think about other options before you file for bankruptcy. You should consider credit counseling. You can get the help you need from a variety of non-profit credit counseling companies. They can help you to lower both your debts and interest owed to creditors. They act as intermediaries between you and your creditors; you pay the counselors and they pay the companies to which you owe money.
Once the bankruptcy is a few months old, you should re-evaluate your credit with all three of the credit bureaus to confirm accuracy. You should double-check all the information on those reports to ensure their accuracy. Resolve any problems immediately so you can build up your credit score as quickly as possible.
Learn of new laws prior to deciding to file for bankruptcy. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Bankruptcy is both a good and a bad thing; it depends on perspective. Whatever your reason for doing it, keep in mind that information is the strongest ally you have throughout the entire process. The advice you have been provided with has probably helped you better understand bankruptcy. Use these tips during the process and feel a little better about it.