Deciding to file a bankruptcy petition is quite significant and should be done carefully and deliberately. Digest the information contained herein, so that you are aware of what you can expect and you know what actions to take prior to making that critical decision. Become as educated as possible.
People generally mostly feel the need to get a bankruptcy filed for when they have more money owed than they can get. If this sounds familiar, you should read up on the bankruptcy laws in your state. Different states have different laws regarding bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. Be sure you educate yourself on local laws prior to filing.
Credit Card
Don’t use a credit card to pay off your taxes before filing for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. If the tax can be discharged, so can the debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Before filing for personal bankruptcy, make sure you are doing the right thing. There are other options available, such as credit counseling for consumers. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Never give up. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. If your property has been repossessed less than 90 days prior to your bankruptcy filing, there is a good chance you can get it back. Speak with a lawyer that will provide you with guidance for the entire thing.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. For example, you may want to consider a credit counseling plan if you have small debts. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Bankruptcy Lawyer
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Consider filing for Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Don’t automatically assume that bankruptcy is your only option. There are many other options including debt consolidation and making payment plans with your creditors. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Most creditors will be willing to work out an option to avoid not getting paid at all.
As you are aware from the previous paragraphs, bankruptcy is not something that just happens. Many steps have to be taken, and all of them must be performed properly. When you implement the suggestions in this article, you can feel confident that you have covered all the bases with regard to bankruptcy filing.
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