Bankruptcy can be a choice for people who have have had the IRS repossess some of their valuables. Filing for bankruptcy will ruin your credit score, but it might be the only way of getting out of debt. Continue reading for more information about how and why to file for bankruptcy.
It is important to remind your lawyer of any details that may be important to your case. Don’t just assume that the attorney will remember it automatically. This is your bankruptcy and your future, so never be nervous about speaking your mind.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. You need to read the exemptions for your state, so you know what property you can protect. If you fail to do so, things could get ugly.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Your attorney and trustee should be privy to all information about your finances. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Make certain that you comprehend the differences between Chapters 7 and 13. All debt will be eliminated with Chapter 7. All the things that tie you to creditors will go away. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. Both options have advantages and drawbacks, so do your research before deciding.
Meet with a few attorneys who offer free consultations before hiring one. Talk to the lawyer and not his assistant, who may not be legally able to help you. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. Expect to make payments for up to 5 years before your unsecured debts are discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Don’t file bankruptcy if you can afford to pay your debts. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
File when the time is right. Proper timing is important, especially when it comes to personal bankruptcy. For some debtors, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
Refrain from feeling shameful about your bankruptcy. The bankruptcy process can make many people feel ashamed, guilty and unworthy. These sorts of feelings are not helpful to you. Indeed, they may cause you mental anguish. Maintaining a positive outlook during a troublesome financial upheaval is the best way to cope with bankruptcy.
Be certain to have a good understanding of bankruptcy regulations prior to filing a petition. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
Financial Information
Try your hardest to present a complete representation of your current financial situation. Forgetting to add these may cause your petition to be delayed, or even dismissed. All financial information needs to be considered by the court. Financial information should include all income, assets and loans.
Gain an understanding of bankruptcy law before you file. There are many traps in the bankruptcy laws that could trip up your case. It is even possible to make the sorts of errors that can cause your case to be dismissed. Make sure you are fully aware about personal bankruptcy before you make any final decisions. This can save you a lot of time and make the entire process easier.
As stated previously in this guide, personal bankruptcy can always be an option. But, filing ought not to be an automatic decision, as it does have serious implications. Knowledge is power when it comes to bankruptcy.
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