Most people never expect to be in the position of facing bankruptcy. Life can change quickly, and bankruptcy may be your only choice. Knowing how to deal with this is vital. If you’re in this boat, read on for some helpful advice.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Bear this in mind; if the tax can be discharged, then the debt can be as well. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
It is imperative that you retain an experienced attorney if you are planning to file bankruptcy. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. An attorney will make sure that everything is being done correctly.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Every one of your debts will be gone if you decide to go with Chapter 7. The ties with the creditor will be broken. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Considering several different lawyers can help find someone to trust.
Your most important concern is to protect your home. Filing for bankruptcy doesn’t automatically involve losing your home. There are mitigating factors, such as lose of value, or multiple mortgages. You may also want to check out the homestead exemption because it may allow you to keep your home.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Once your initial filing is complete, it is time to take some time to relax a little. After filing, many people find themselves stressing over their situation and how to fix it. If you let the stress get to you you may get depressed if you’re not doing the proper things to fight it. Once the process if over, your life will improve.
Act at the right time. Timing is critical, particularly when it comes to filing for bankruptcy. 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. The professional advice of a bankruptcy lawyer can help you pin down the best time to file given your current financial state.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. You need to know certain things, like the fact that it’s illegal to transfer any asserts 12 months before filing your claim. It’s also prohibted to run up debt on credit cards just prior to filing.
Know the laws and guidelines about bankruptcy before you formally file. There are many issues with personal bankruptcy code, and these pitfalls can cause problems with your case. Not only could your case be dismissed, but it may also affect your ability to refile. Make sure you check into your case and see that you have the paperwork filled out correctly. This will make things easier in the long run.
Avoid making payment that might interfere with your filing. Check the bankruptcy laws in your state to make sure you have not done anything in the past year to make yourself ineligible to petition for bankruptcy. Know what the laws are prior to making any payments.
It is important not to delay the process of determining whether or not you should file for bankruptcy. Your debt will only continue to mount as you waiver on the decision, difficult as it might be. If you talk to a financial professional, they can assess your situation and give you suggestions on what could solve the problem.
If you find that filing for bankruptcy is the best option for you, be sure that you fully understand the process. This is much easier if you know more about the basics of bankruptcy. This article has shown you much of this important information, and you can now face your financial situation in a calmer and less stressed manner.
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