Filing for bankruptcy is not a simple process. There are multiple ways you can file for bankruptcy, and the one that best fits you will depend on your financial situation and what you owe. Before deciding to file for personal bankruptcy, you should learn everything you can about it. The following tips will help you understand bankruptcy.
People generally mostly feel the need to get a bankruptcy filed for when they have more money owed than they can get. If you find yourself going through this, you should know all about the laws that are in your state. Laws differ from one state to the other. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Do not file before learning about the bankruptcy laws in your state.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The U.S. Department of Justice and American Bankruptcy Institute are two such places to look. 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.
Credit Cards
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. A common rule is that dischargeable tax means dischargeable debt. This makes using a credit care irrelevant, since bankruptcy will discharge it.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Avoid ever touching retirement funds until you have no other choice. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
You should be able to meet with a specialized lawyer for free to ask your questions. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You can think about your decision before making a commitment. This allows you time to speak with numerous lawyers.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. For example, consumer credit counseling programs can help if your debt isn’t too large. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. The Chapter 7 variety can help you eliminate your debts almost entirely. This includes creditors and your relationship with them will become no longer existent. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Both options have advantages and drawbacks, so do your research before deciding.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Do not forget to be around those you love. The process for bankruptcy can be hard. At the end of the process, many people are left with feelings of shame and worthlessness. There are a number of people who wish to go into seclusion while undergoing the process of personal bankruptcy. Do not isolate yourself or you will put yourself at risk for depression. Spend time with your family, talk about your problems and find things that relax you.
Clearly, filing for bankruptcy takes a great deal of thought and consideration in advance. If you feel that it is best for you to file for bankruptcy, a qualified attorney can be of great assistance, ensuring you make the best choices.
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