Do not be alarmed if you find yourself falling further into debt or have contemplated bankruptcy. There are many effective ways to help yourself get back on your feet financially so you do not have to file for bankruptcy. Read through these tips to avoid going through bankruptcy.
One of the best ways to learn more about the bankruptcy process is to hit the Internet and look up reputable bankruptcy websites. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. Knowing is half the battle, after all, and these websites are the first step in learning what you need to know to make your bankruptcy smooth and stress-free.
Do not use a credit card to pay income taxes and then file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Generally speaking if you can discharge the tax, you can discharge the debt. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Credit History
Ask yourself if filing for bankruptcy is truly your best option. Alternatives do exist, including consumer credit counseling. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Do not be afraid to remind your attorney of important specifics of your case. Just because you have told him something of importance that he will remember it. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. You need to read the exemptions for your state, so you know what property you can protect. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Talk to the lawyer and not his assistant, who may not be legally able to help you. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Take steps to ensure your home is protected. You don’t have to lose your home just because you are filing for bankruptcy. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Check to see if you pass the requirements necessary to file for a homestead exemption.
If your income exceeds your obligations, you should not seek bankruptcy protection. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
Don’t put off filing for bankruptcy until you are in dire straits. It is absolutely difficult to admit you require help. On the other hand, the longer you delay, the more debt you rack up. Talk to a lawyer as soon as you can to get the advice that you need.
Credit Cards
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. This is not a good decision on their part because credit cards help in building good credit. If you do not use credit, you will not rebuild the type of credit you will need in making future purchases. You just have to realize that proper planning is going to have to take place and that you are going to have to start back up one step at a time.
Go to a bankruptcy lawyer for advice, instead of filing on your own. The complexities of the process of filing, court proceedings and other issues can best be handled by a competent lawyer. Attorneys can prepare your documents and help you with any concerns you may have.
If you file for Chapter 7 bankruptcy, then find out you cannot protect your home, it may be possible to change your filing to a Chapter 13. Some cases make it best for you to take your Chapter 7 case to a Chapter 13 one, so make sure that you talk this over with your attorney.
If you’re feeling down, try talking to people who have overcome bankruptcy. You may feel embarrassed and out of sorts while going through personal bankruptcy, because it is a very stressful process. By contrast, the Internet is a great place to vent and ask for support from others who have been through the bankruptcy gauntlet and come out the other side.
Chapter 7
Do not make the assumption that every dollar of debt will be disscharged in a Chapter 7 case. You may be required to negotiate new payment terms with some creditors and there are some debts that are never discharged. For example, you can’t discharge court-sanctioned fines, child support obligations or alimony payments via Chapter 7.
If you’re willing to learn and exercise patience and understanding in the process, filing bankruptcy doesn’t have to be a difficult process. If you are able to buy some time, you should do so. Remember to keep working towards your goal of avoiding bankruptcy. Start planning things today and start looking toward the future.
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