Need To File Bankrupcy? Use These Solid Tips!

Posted at by PConran on category Bankruptcy

Filing for personal bankruptcy is quite a complicated process. There is not simply one type of bankruptcy, so the choice you make will be determined by your debts and what finances you have. Prior to filing your petition, you really need to gain an understanding of how personal bankruptcies work. The tips included in this article should give you some direction as you go through the process of deciding to file and filing for personal bankruptcy.

When people owe more than what can pay, they have the option of filing for bankruptcy. If you find yourself going through this, you should know all about the laws that are in your state. Each state has their own bankruptcy laws. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. It is important to be cognizant of the laws in your state before filing for bankruptcy.

If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. If the tax can be discharged, so can the debt. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.

It should go without saying, but refrain from lying in your bankruptcy filings. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.

When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Don’t withhold information, and create a smart way of coping with the reality of the situation.

Consider other alternatives before filing for bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.

You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7, for example, will wipe away every one of your outstanding debts. The ties with the creditor will be broken. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.

If you are making more money than you owe, bankruptcy should not even be an option. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.

Look into all of your options before you choose to file for bankruptcy. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Many times creditors are happy to work with you to ensure that you will repay your loan.

Now you know that filing for bankruptcy is something to be considered before going through with it. If you feel that bankruptcy best suits your current financial position, then ensure you retain an experienced attorney who can help you.



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