Bankruptcy is a two-sided coin: relief/stress. On one hand, people will be scrutinizing your private financial affairs. On the other hand though, after your bankruptcy discharge, you can rebuild your finances and stop all the bill collection calls. Here are some great tips for making bankruptcy easier.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. If the tax can be discharged, so can the debt. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
You may still have trouble receiving any unsecured credit after a bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. This will prove that you want to improve your credit score. After a certain time, you will then be able to acquire credit cards that are unsecured.
Stay up to date with any new bankruptcy filing laws. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. Keep up with your current state’s laws and regulations to figure out what steps you should take.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Spend time researching the advantages and disadvantages of filing for each one of these. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Act when the time is right. In bankruptcy filing, timing is quite important. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Have a chat with a bankruptcy specialist to discover when the ultimate time would be for you to file.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. Going through the filing process often brings out the worst in people, causing them to feel a variety of negative emotions. Do not let these negative feelings influence your decision. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. Be certain that you hire a competent lawyer to minimize the stress and anxiety you are under. Get recommendations and look into other qualifications rather than just choosing based on cost alone. Think about quality rather than cost when hiring an attorney. Make sure people who have experienced bankruptcy give your referrals. You could also sneak into court to watch a real live bankruptcy proceeding to see how that attorney handles the situation.
If you are thinking about filing for bankruptcy, one of the first things you should do is look into the laws of your state. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking that the debt will be erased. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
A few months after bankruptcy is complete, get your credit report copies from the 3 credit reporting agencies. You will want to see that everything on the report states that the debts have been discharged and closed out. If you find any discrepancies, immediately follow up on them so you can continue to repair your credit.
When you file for bankruptcy, you want to be certain that your papers include every debt that you need to get discharged. If you fail to list a debt, it may not make it into your discharge. It is up to you to ensure that all important information is there, so all debts are discharged.
Regardless of how terrible your situation is, when you choose to file for bankruptcy, always be honest. It can be catastrophic to make up things about your assets and debts. This activity is illegal. If you lie in the recording of your debts and assets, you may end up in prison for quite some time.
Chapter 7
If, after you file a Chapter 7 petition, you learn that the homestead exemption does not apply, it might be possible to convert your case to a Chapter 13. Sometimes it is better to switch the whole Chapter 7 case to the Chapter 13 case. Speak with your attorney for advice on this.
Be sure the lawyer that you choose is very experienced in bankruptcy law. There are so many bankruptcy attorneys to choose from. While it may be tempting to hire the most inexpensive one, you will want to first make sure that they have experience with filing for bankruptcy.
Bankruptcy is both a good and a bad thing; it depends on perspective. No matter why you are filing, you must remember that knowledge is the key to help during the process. The tips laid out here will help you cope with bankruptcy in an easier manner. Utilize these tips and let them guide you towards a stress-free financial future.
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