A lot of people see bankruptcy in a negative way, but change their minds quickly when they are directly affected. A financial catastrophe, such as divorce or job loss, can make a situation where filing for personal bankruptcy is a necessity. If that happened to you, the following article will be of great assistance.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Do not use a credit card to manage your tax issues and then file bankruptcy. In many parts of the country, this debt will not be dischargeable, and you could end up owing the IRS a whole lot more. This means using a credit card is not necessary, since bankruptcy will discharge it.
The federal statutes covering bankruptcy can tell you exactly which assets are exempt during the process. If you aren’t aware of this, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Alternatives do exist, including consumer credit counseling. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
Don’t pay for the consultation and ask him or her anything you want to know. Most attorneys offer free consultations, so meet with several. Only make a lawyer if you have met with several attorneys and all of your questions have been addressed. You do not need to make a decision immediately after this consultation. This allows you time to speak with other attorneys.
Learn of new laws prior to deciding to file bankruptcy. Bankruptcy laws are in constant flux, you need to know what you are getting yourself into. Your state’s website will have the information that you need.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Don’t assume that he’ll remember something from a month ago; tell him again. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Make sure that you meet with an actual lawyer and not an assistant or paralegal, because it is illegal for these people to give legal advice.
Filing for bankruptcy does not necessarily mean you will lose your house. You might be able to keep your home, for instance, such as your home decreasing in value or having a second mortgage.You are still going to want to check into homestead exemption because it may allow you to keep your home.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Take the time to learn about them extensively, and look at the advantages and disadvantages of each.If you do not understand what you are reading, meet with your lawyer and ask them prior to making a decision.
Look at all of your options before you choose to file for bankruptcy. Loan modification plans on home loans are dealing with foreclosure. The lender wants their money, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. When push comes to shove, creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Talk to the lawyer and not his assistant, who may not be legally able to help you. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Before you choose Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, which are usually close relatives and friends. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, they will be required to pay the debt.
It is possible for those going through the bankruptcy process to feel unworthy, remorse and embarrassment.These feelings do not help you to make rash decisions and cause psychological problems.
Always protect your house. It isn’t inevitable that you will lose your house when you file for bankruptcy. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. You are still going to want to check into homestead exemption either way just in case.
Make sure that the lawyer you hire is an experienced bankruptcy lawyer. There are lots of lawyers that you can pick from.
If you are facing a looming tax debt, don’t look at bankruptcy as a way to avoid paying. Some filers pay their taxes that they owe with credit card and then file for bankruptcy. This is illegal, however, and not only will you still have to pay taxes, as well as the fees and interest that it accumulates.
Before filing for bankruptcy ensure that the need is there. Consolidating current debt could make it easier to manage. The bankruptcy process takes forever to finish and is very nerve-wracking. You will have trouble getting credit down the line. Because of this, filing for bankruptcy should only be used as a last resort.
Make sure you are always honest when filing your bankruptcy petition is completely accurate. Any attempt to hide something from the court could cause your case. Disclose income or assets that are relevant to everything going on. This shows the court that you can be trusted and helps them make the right decision.
If you have attempted every single option for dealing with your finances and you still come up dry, then you may have to file for bankruptcy. Don’t be overly stressed, because there are many things that you don’t have control over. Apply the advice from this article to help ease your burden when filing for bankruptcy.
Spend time with loved ones. Bankruptcy can take a toll on you. It’s generally stressful, lengthy and can make people feel guilty, ashamed, and unworthy. Most people adopt a very negative attitude toward bankruptcy. But, keeping to yourself is likely to cause even greater sadness and despair. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.