Filing for personal bankruptcy is quite a complicated process. There are a number of kinds of bankruptcy. The type that applies to you will be chosen based upon the type of debts you have. Learn as much as you can about the topic before you make any decisions regarding filing. The following tips will help put you on the right path.
Credit Cards
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. If the tax can be discharged, so can the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Before filling for bankruptcy, determine which assets will be exempted from seizure. Bankruptcy exemptions are properties may not be seized during bankruptcy. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to 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.
A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Comparing different lawyers makes it possible to find one with whom you work well.
Safeguard your home. Filing for bankruptcy does not guarantee that you will lose your house. There are mitigating factors, such as lose of value, or multiple mortgages. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
Avoid filing for bankruptcy if you make more money than your monthly bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Interest Rates
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Although the entire process can be stressful, do not allow the stress to take over. The process of filing for bankruptcy can make people a nervous wreck. It is essential to cope with this stress well, to prevent becoming depressed. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, it won’t be as easy as it may have been to get one prior to the bankruptcy. Your trustee must approve any new loans. Draw a budget up and show how you can pay the newer loan payment. You also need to be prepared to answer questions about your need for the new item.
Act when the time is right. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. For some debtors, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Discuss the strategic timing of your bankruptcy with your attorney.
Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Don’t hire based solely on cost. Think about quality rather than cost when hiring an attorney. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
It is important to file bankruptcy before its too late. It is a big mistake to avoid financial problems, thinking they may go away on their own. Debts can multiply very quickly, and can result in you losing money to wage garnishment, or even losing assets that are part of a secured loan. When you find that you cannot take care of your debts anymore speak with an attorney for bankruptcy to talk things over.
As you can see, filing for bankruptcy is a serious decision that must be considered carefully before you make it. If you know what makes sense for you, you can work with an experienced bankruptcy lawyer and get ready to experience a clean financial slate.
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