Solid Advice On Filing For Personal Bankruptcy

TIP! You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more.

Learning more about the process of bankruptcy is, sadly, something that a lot more people have to do today. The economy has hit many people from all walks of life hard. However, before you make the decision to file for personal bankruptcy, you should understand the filing process and thoroughly investigate whether it is the right choice for you. Read further for some helpful advice regarding bankruptcy.

TIP! Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. Not only is hiding income and assets wrong, it is also a crime.

Individuals often seek to file for personal bankruptcy protection if their debts exceed their ability to repay them. If you are in this position, you need to be familiar with the laws in your area. Each state has its own set of rules regarding bankruptcy. Your house is safe in certain states; however, in other states, it isn’t. Before filing for personal bankruptcy, be certain that you are familiar with the laws.

TIP! Never pay to have a consultation with a lawyer, and ask a lot of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision.

Do not use your retirement fund or savings to pay off creditors. Don’t touch retirement accounts unless you don’t have a choice. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.

TIP! Bankruptcy is tricky and hiring a good lawyer will be a must. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own.

The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.

TIP! Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Bankruptcy laws change a lot and before making the decision to file, you need to know what you are getting yourself into.

Research what assets are exempt from seizure before you decide to declare bankruptcy. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. 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. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.

TIP! Check into less drastic solutions prior to declaring bankruptcy. You could find relief from small debts by using a consumer credit counselor.

Before declaring bankruptcy, ensure that all other options have been considered. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. Also, you could try to get your payments lowered on your own. If you decide to do this, get a copy of anything you agree to.

Chapter 7

TIP! Look at all the alternatives to bankruptcy before filing. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden.

You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All of your financial ties to the people you owe money to will disappear. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. Look into both types of bankruptcy before deciding which one would suit your particular needs.

TIP! See if your attorney can help you lower your payments if you want to keep your vehicle. Lower payments can sometimes be structured into a Chapter 7 solution.

Make sure bankruptcy is truely your only option before filing. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. Loan modification can help you get out of foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. 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.

Chapter 7 Bankruptcy

TIP! Prior to filing, do not use your credit card to get a cash advance, knowing your debts will be eliminated. Not only is this fraud, but you could still be liable to repay the money at the end of the day.

If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, which spell financial disaster for them.

TIP! Before you file for bankruptcy, you must commit to acting more responsible with your finances. In other words, you do not want to waste your efforts here by starting to ring up more and more debt.

As mentioned earlier, because of the poor economy, bankruptcy filings are more common than ever. To ensure that you make great decisions when dealing with bankruptcy, utilize the excellent advice given above.


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