What Should You Consider When Filing Bankruptcy?

It can be hard to file bankruptcy. If you are in financial trouble, it’s easy to feel trapped and a little scared about your future. Nonetheless, it is possible for you to continue getting the things you need (e.g. a home loan or an automobile loan) even if you have a very low credit score.

Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Generally speaking if you can discharge the tax, you can discharge the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.

Retirement Accounts

As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Avoid touching your retirement accounts whenever possible. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.

It is important to remind your lawyer of any details that may be important to your case. Don’t assume that they will recall every detail that you go over with them without a friendly reminder. Your case and future are affected by the attorney’s action, so never be afraid to communicate.

Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.

Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. The lawyer representing you when you file needs to have full knowledge of your financial situation. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.

Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Only make your decision if all your questions and concerns are adequately addressed. It is not necessary to come to a decision immediately following the meeting. This allows you time to speak with numerous lawyers.

Chapter 13 Bankruptcy

Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 eliminates all debts. Your ties with all creditors will get dissolved. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. To make the wisest choice, you will need to understand the consequences of each of these two options.

Don’t forget to enjoy your life once your finances get fixed. It is common for people to stress when filing. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Life will get better; you just need to make it through the bankruptcy process.

Filing for bankruptcy is hard on anyone, and can cause extreme amounts of stress. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t skimp when hiring a good lawyer. It is not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. When looking at bankruptcy attorneys, consider sitting in on one of their court hearings to find out how they handle the case.

Bankruptcy should not be put off until the very last second. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. As soon as you see your debts getting out of control, seek the counsel of a good bankruptcy attorney to see what your options are.

It is important to be upfront with all your financial information when filing for bankruptcy. Forgetting anything can cause a delay, or even a dismissal. No matter how insignificant a sum seems, include it in the documentation. When it comes to the types of things you might not be thinking about adding, just think about any automobiles you have, any money under the table you’re making, etc.

Consider any other options available before filing for personal bankruptcy. One good option might be credit counseling. There are many non-profit debt counseling services available. They can work with both you and your creditors to find a feasible way in which your debts can be paid off. You pay the organization, and they pay creditors for you.

Under no circumstances should you take out a huge cash advance on any of your open credit cards before filing for bankruptcy. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.

Don’t spend too much time deciding whether or not you should file for bankruptcy. It is absolutely difficult to admit you require help. On the other hand, the longer you delay, the more debt you rack up. By speaking with a professional in a timely manner, you can get good advice before the bankruptcy process gets too difficult.

Even if you have filed for bankruptcy you now realize that this does not limit you in life forever. Lenders look kindly on you if you can prove you are saving your money and trying to re-establish your credit. You will see just how big of a difference saving a little money can make when you go apply for your next home or car loan.