The Complex World Of Personal Bankruptcy
Posted at by PConran on category BankruptcyThough making the choice to file bankruptcy is never easy, it is often essential. The more you educate and prepare yourself for the bankruptcy process, the better prepared you will be to handle it. Keep reading to learn some solid advice for navigating the treacherous world of bankruptcy.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this applies to you, be sure that you know what the laws of your state are. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Do not file before learning about the bankruptcy laws in your state.
Do not use a credit card to pay income taxes and then file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Do not use your retirement fund or savings to pay off creditors. You should make every effort to leave your retirement accounts untouched until your retire. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. It is important that you are completely transparent, showing everything financial that needs to be known. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Bankruptcy should not be filed by anyone who makes more than their bills cost. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
Facing bankruptcy is a negative situation that can bring on stress. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Get recommendations and look into other qualifications rather than just choosing based on cost alone. The cheapest attorney may not be the best, but the most expensive may not be the best either. Get referrals from people you know who have been in your situation, check with the better business bureau and use free consultations to interview several people. Try attending a hearing to find out how bankruptcy attorneys handle the situation.
No one is eager to file for bankruptcy, but in many cases, the alternatives are even worse. Now that you’ve read over this article, you learned some things that are from others who have experienced this too. If you can understand the path that others have followed, your journey will be more successful.