Making the decision to file for bankruptcy isn’t an easy one, but sometimes it can be the only way out of a mountain of debt. This decision may not be easy, but it is comparatively easier when you know what the process entails and how to navigate it. Keep reading to learn some solid advice for navigating the treacherous world of bankruptcy.
Be sure everything is clear to you about personal bankruptcy via looking at websites on the subject. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. If the tax can be discharged, so can the debt. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Do not hesitate to remind your lawyer of any details regarding your case. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. It’s your financial future that is in his hands; don’t hesitate to speak up.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Don’t withhold information, and create a smart way of coping with the reality of the situation.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For example, you want to look into credit counseling. This is the best option for small debts. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. In Chapter 7 bankruptcy, your debts are all eliminated. Your former ties with creditors will cease to exist. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. Take the time to learn more about these different options so you can make the best decision possible.
Make time to visit with family and friends during the bankruptcy process. Bankruptcy proceedings can be extremely harsh. It is long, hard and sometimes leaves people feeling guilty or ashamed. Many people decide to hide away from the world until the process is over. This is not recommended because you will only feel bad and this may cause you to feel depressed. Because of this, you need to make sure you spend as much time as you can with your family and friends, even if you are ashamed of your finances.
Know your rights when filing for bankruptcy. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.
Don’t let shame consume you during the bankruptcy process. This process is less that glamorous, and it makes most people lose their self-esteem. Learn to accept these feeling at face value– you can’t prevent yourself from feeling them, but you can stop them from controlling you. Keep a positive state of mind to deal with your tough financial situation.
Make sure you know what you should be doing when you file for bankruptcy. You need to be aware of any issues you will encounter with the bankruptcy code. There are mistakes that may cause the dismissal of your case. Spend some time learning about personal bankruptcy. Doing so will pave the way to an easier process.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. Although filing for bankruptcy stays on your financial record for 10 years, you can immediately begin to improve your credit. The main benefit to filing for bankruptcy is the chance at a new start.
Before you file, make the choice to be fiscally reliable. Avoid taking on more debt right before you file for bankruptcy. Bankruptcy judges and creditors may examine current and past behavior as they work to resolve your case. Even though you may have found yourself in a bind, you want to show them that you are trying to make serious efforts to stabilize your finances.
Although people don’t want to file bankruptcy, it’s sometimes necessary. Having studied the information in this article, hopefully you are better prepared to deal with the bankruptcy process. Taking time to learn from those who have traveled this road before you will make your own journey less stressful.
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