There is no one that goes through life expecting to experience bankruptcy. Changing circumstances often create a situation where there is no better choice, and knowing how to deal with it is important. If you discover that you are faced with bankruptcy, you can help yourself with the knowledge provided below.
Most people end up filing for personal bankruptcy because they owe more than they make. If you are in this position, you need to be familiar with the laws in your area. Most states differ in their laws governing bankruptcy. For instance, some states protect you from losing your home in a bankruptcy, but others do not. See to it that you understand the bankruptcy laws in the area that you live prior to filing.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. This means using a credit card is not necessary, when it will just be discharged.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. Be well prepared for bankruptcy by reviewing this list. It will tell you whether are not the things you value most are subject to seizure. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Before you file, make sure you understand current bankruptcy laws. These kinds of laws are constantly changing and it is important that you are aware of these changes, so that you can learn how to properly file for bankruptcy. To stay up-to-date on these laws, check out your state’s government website.
Before filing for bankruptcy ensure that the need is there. Perhaps just consolidating some of your existing debt, could make them easier to manage. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. It will certainly affect the credit rating that you have in the future. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Do not forget to be around those you love. The process for bankruptcy can be hard. It is lengthy, stressful and often leaves people feeling ashamed, unworthy and guilty. Many people tend to hide until their process is completed. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Think about all the choices available to you when you file for bankruptcy. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. There are a lot of ways that your lender can assist you, such as reducing interest rates, eliminating late fees, or extending the term of your loan. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Understand the rights you have as a bankruptcy filer. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. Only a few kinds of debt, like student loans or child support, are ineligible for bankruptcy. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Make sure you act at an appropriate time. When it comes to filing for bankruptcy, your timing is important. In certain situations, you should file right away, but other situations will warrant you waiting. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. Maxing out your credit cards immediately before filing is also illegal.
Don’t wait when you’re thinking about filing for bankruptcy and have been for a while. Although it may be very difficult to admit that bankruptcy is the answer for you, it will be much harder to continue spiraling into a debt quagmire. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
It may be counterintuitive, but in some cases, pulling the trigger and filing for bankruptcy may have better credit consequences than continuing a pattern of credit delinquencies. While bankruptcy may appear in your credit report, you could surely try to fix your damaged credit. Among the advantages of bankruptcy is that of a clean slate.
Once you determine that claiming personal bankruptcy is something that you must do, you will need all the advice that you can get. The process will get easier as you learn all you can. This article has provided much of that information, so that you can approach your finances in a less stressed state of mind.