Are your finances so awful that you are considering filing for bankruptcy? Do not worry, because you are not the only one. Some people have turned to bankruptcy, as it is their only option for getting rid of a bad financial situation. So have a look through the contents of this article to see what you should know about bankruptcy.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If this is your case, you should do some research about bankruptcy laws in your state. Every state is different when it comes to dealing with bankruptcy. Some states protect your home, and others do not. Know what the laws are in your state before filing.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Exhaust every other option before making the decision to file for personal bankruptcy. It is possible to take advantage of other options, like consumer credit counseling. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. If Chapter 7 is what you file, your debts will get eliminated entirely. Your responsibilities to your creditors will be satisfied. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Seeking out different attorneys is all part of the process until you find someone that you can trust.
Protect your house. There are many options available to help protect you from losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Expect to make payments for up to 5 years before your unsecured debts are discharged. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Bankruptcy can be overwhelming to most people, and can be quite stressful. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Don’t let cost be the sole factor in who you hire. You do need someone who is costly, just someone who is good at what they do. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. Attending a court hearing will give you experience as to how lawyers handle these cases.
As mentioned previously, countless others have also experienced financial problems that have driven them to bankruptcy. However, thanks to the piece above, you are better prepared to face the challenges that may come your way. The tips in the article above will help you get through your bankruptcy.
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