Anything that leads you to declaring or filing for bankruptcy is probably not a happy story, but that does not mean that your life after bankruptcy cannot be better. Wiping the slate clean means having a new lease on life. Continue ahead to learn how you can smooth out the bankruptcy process so it’s not a financial disaster.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. If the tax can be discharged, so can the debt. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Although you may find a good lawyer through an advertisement, you can simply find a much better lawyer if the lawyer is recommended to you by someone who has gone through the process and who has the inside track on the lawyer’s true capabilities.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. You can determine exactly which of your possessions are at risk by consulting this list before you file. This will ensure that you do not have any surprises once you have filed bankruptcy.
Don’t give up. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. 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. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. All debt will be eliminated with Chapter 7. Any ties you have concerning creditors will definitely be dissolved. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
Safeguard your most valuable asset–your home. Bankruptcy doesn’t always mean you’ll lose your home. You can still keep your home, it just depends on your specific situation and the value of your home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Chapter 13
Consider filing for Chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
As you read in the beginning of this article, bankruptcy is not something anyone looks forward to. However, the story that gets written after bankruptcy does not have to be depressing too. Using the advice you have found here, bankruptcy can be the beginning of a new, exciting chapter in your life!
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