Many people find themselves feeling unworthy, depressed or frightened when going through bankruptcy. Many people are fixated on the question as to how they will repay their debts so much that they are unable to live their daily lives. By reading this article, you will soon realize that bankruptcy is not the end of the road for your financial future.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If you are in this position, you need to be familiar with the laws in your area. Every state has a separate law having to do with bankruptcy. Your home is safe in some states, but in others it’s not. It is important to understand the laws in your state before filing for bankruptcy.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The United States Justice Department, the ABI (American Bankruptcy Institute), as well as the NABCA (National Assoc. Consumer Bankruptcy Attorneys) are excellent sources of information. You need to spend some time gathering valuable information so you can file your bankruptcy with confidence.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Your savings accounts offer valuable financial security so try to leave them intact.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
If you can, get a word-of-mouth referral for a lawyer. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
Chapter 13
Research Chapter 13 bankruptcy, and see if it might be right for you. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Consider that if you even miss one payment, your case will not be considered by the court.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
File at exactly the right time to maximize the effect of your bankruptcy. Timing is very important when it comes to personal bankruptcy filings. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Discuss your specific situation with a bankruptcy lawyer to find out when would be your best time to file.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. Often, with bankruptcy, come feelings of guilt, shame and worthlessness. But, there is nothing positive about feeling this way and it can actually affect your mental state. Keep a positive state of mind to deal with your tough financial situation.
Do some research about bankruptcy laws before filing for bankruptcy. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Additionally, it is against the law for any filer to boost up the debt amount they carry on any credit cards just before filing.
Do not take too long deciding that it is time to declare bankruptcy. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. When you speak with a professional quickly, you will get valuable advice that will help to prevent your situation from spinning out of control.
Keep in mind though that personal bankruptcy might prove a wiser choice for your credit history than keeping making late payments. While bankruptcy may appear in your credit report, you could surely try to fix your damaged credit. The key to a bankruptcy is the fresh start you will get from it.
List out who you owe money to. Your debts in particular will serve as the basis of your claim. Every single debt you have will need to be listed here. Be 100% certain that the amounts you are claiming as being owed are true and correct. Don’t rush through the process if you desire that the amounts get discharged the right way.
You should now see there is hope, even if you have had to file for bankruptcy. It can be daunting, but you can do it. Remember these tips so you can dig your way out of debt.
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