How Can Personal Bankruptcy Affect Your Life?
Posted at by PConran on category BankruptcyPersonal bankruptcy may be the right option for folks who have had property seized by the IRS. Your credibility with lenders will take a beating, but sometimes bankruptcy is the only thing you can do. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. You will find that each state has their own bankruptcy laws. Some states may protect you home, and some may not. Make sure you know the laws where you live before you file.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. You should never touch your retirement accounts, unless you have absolutely no choice. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Determine which assets won’t be seized before filing for bankruptcy. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
It is important to understand your rights when filing bankruptcy. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Consult with a lawyer who can advise you on what you need to do to file a petition.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. Don’t hire an attorney who fails to address all your concerns and questions. You don’t need to decide what to do right away. After your consultations, do some additional research on each attorney you consider qualified for the job.
Think carefully about your different options before filing for bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. Sometimes you can negotiate a reduced payment, though you must strive to get it all in writing.
Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
If you are going to be filing for bankruptcy, think about filing Chapter 13. With a consistent income source and less than $250k in debt, try filing for Chapter 13. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
We would like to reiterate that you always have the option of filing for personal bankruptcy. It is not something that should be done lightly, however, due to the negative effects it can have on one’s credit. Arming yourself with knowledge is a good way to protect assets and approach the process wisely.