Advice For People Who Need To File Bankruptcy

Most people do not think they will ever need to consider filing for bankruptcy. Sometimes things in life happen, but you have to be prepared for what comes your way. If you have questions about what you should do in this situation, continue reading to learn some great advice.

Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.

TIP! Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this is your case, you should do some research about bankruptcy laws in your state.

If you can, get a word-of-mouth referral for a lawyer. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.

Make sure your home is safe. You don’t have to lose your home just because you are filing for bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.

Don’t file for bankruptcy the income that you get is bigger than your bills. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.

TIP! Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money.

If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. Chapter 7 usually can help payments be lowered. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.

Chapter 7

Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Debts which you shared with another will not be your responsibility any longer if you file for personal bankruptcy under Chapter 7. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.

TIP! If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. You should make every effort to leave your retirement accounts untouched until your retire.

Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. It is a little more difficult, though. Normally, the trustee assigned to your bankruptcy must approve any new loan. You need to show them why and how you can handle paying back the new loan. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.

Be certain to be transparent about all of your financial information when the filing of for personal bankruptcy. If the court thinks you are attempting to conceal information, your petition could be denied. Make sure that you add very small sums, even if you believe that they aren’t important. Don’t forget about side jobs, loans you’ve taken out or vehicles that might count as assets.

There are a lot of things to consider prior to filing for bankruptcy. Have you been through credit counseling first? Various non-profit companies are out there to give you assistance. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. You’ll make your payments to the company, and the company will pay off your creditors.

TIP! Do not hesitate to remind your lawyer of any details regarding your case. Don’t assume that he will remember something you told him weeks ago.

Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.

Do not hesitate or stall when determining if filing for bankruptcy is the correct choice for your life and situation. It’s very difficult admitting you need help, but waiting too long can actually make it worse. By talking to a professional, as soon as possible, they can give you some advice on things you can do before it all gets too complicated.

Every single asset is not necessarily lost when you file for bankruptcy. Personal property can be kept. Items such as family mementos, home decor, furniture, personal jewelry, clothes and more fall under private property. Your current state’s laws, deciding between Chapter 7 or 13, and your current financial position will determine just how much you get to keep.

TIP! Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is intended to wipe out all outstanding debts.

If you find that filing for bankruptcy is the best option for you, be sure that you fully understand the process. The more knowledge you gain, the simpler the process becomes. Now that you have read the advice shared here with you, you can move forward on the right financial path for you.