It can be a complicated process to file for personal bankruptcy. Several different types or “Chapters” of bankruptcy are available to you. Depending on the state of your finances and the type of debt that you have accrued, you may qualify for one type of bankruptcy, but not another. It’s imperative that you learn everything you can about the process before you even think about filing. The below advice can assist you in beginning.
Most people end up filing for personal bankruptcy because they owe more than they make. If this sounds like you, start familiarizing yourself with your state laws. Every state is different when it comes to dealing with bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Do not file before learning about the bankruptcy laws in your state.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. 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.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Lawyers are people too, and sometimes they forget important information and need to be reminded. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Bankruptcy Petition
Keep at it! Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. Should you choose Chapter 7, your total debt load will be erased. All the things that tie you to creditors will go away. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Don’t automatically assume that bankruptcy is your only option. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. You can apply for a modification of your mortgage if your home is going into foreclosure. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. It is just tougher. You must meet with a trustee to gain approval for a new loan. Draw up a budget, demonstrating that you can afford the new loan payment. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Be decisive at the correct moment in time. When it comes to filing for personal bankruptcy, timing is vital. There are occasions where it pays to delay and others where a quick decision is the best option. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
Prior to filing for bankruptcy, tell yourself that you cannot use the word “shame”. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Learn to accept these feeling at face value– you can’t prevent yourself from feeling them, but you can stop them from controlling you. Staying positive and upbeat is the proper way to deal with bankruptcy.
Bankruptcy should not be put off until the very last second. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
If you plan to pay debts off before you file for bankruptcy, be careful. When you’re planning on filing bankruptcy, your finances have to be in a state of limbo, for lack of a better term. Paying off creditors, transferring assets, and acting in any way other than financially strapped may result in a failed claim. Do not make a decision about filing until you are aware of all the current rules regarding bankruptcy.
This article has hopefully made it clear that declaring bankruptcy is a big decision that should be considered at length. If it’s the best course of action for your current financial situation, then be sure to find an attorney with a lot of experience with personal bankruptcy so that you may be able to have a better financial future.
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