Being in debt is a terrifying experience. Unfortunately, once you’re in this situation, once you realize you have it. The piece that follows does offer some pointers on what to do regarding bankruptcy if you are way over your head in debt.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. This means using a credit card is not necessary, when it will just be discharged.
If this sounds familiar, start familiarizing yourself with your state laws. Each state has their own set of rules regarding bankruptcy. For instance, the personal home is exempt from being touched in some states, but others do not. You should be familiar with the laws before filing.
Don’t avoid telling your attorney about any specifics of your case. Don’t assume that he will remember something you told him again. This is your bankruptcy case, so never be nervous about speaking your mind.
Always be honest when filling out paperwork. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Be sure to hire an attorney before you embark upon filing for bankruptcy. You might not understand all of your case. A specialized bankruptcy can ensure that you are handling your bankruptcy filing the right way.
Stay up to date with any new laws that may affect your bankruptcy filing laws. Bankruptcy law evolves constantly, and therefore you must understand how such changes may affect your situation. Your state’s website will have the information that you need.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. There are a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Before making the decision to file for bankruptcy, be sure you’ve weighed other options. For instance, you may want to consider a credit counseling plan if you have small debts. You might also be able to negotiate lower payments yourself, but be certain to get any arrangements with creditors in writing.
Be certain to speak with an attorney, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice.
Your most important concern is to protect your home. Filing for bankruptcy doesn’t automatically involve losing your home. It may be possible to keep your home if the value has depreciated, or there is a second mortgage. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Understand the differences between Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Take the time to find out about each one online, and then figure out which one will be best for your particular situation. If you are confused by what you find, talk to your lawyer so he or she can help you make an informed choice.
Don’t file bankruptcy if you can afford to pay your bills. While filing may seem simple and a way to get out of paying your debts, it is a stain that will remain on your credit report for seven to ten years.
Before you decide to file for Chapter 7 bankruptcy, you should consider what your bankruptcy might have on others, as your family and friends may be affected. You may have your responsibility for your portion of the loan discharged under Chapter 7. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
In order for this to succeed, your car loan must be one with high interest, have a higher interest loan for it as well as a consistent work history.
Bankruptcy can cause anxiety and a difficult time that always leads to lots of other physical and emotional issues. To avoid getting too stressed, hire a good lawyer. Don’t let cost be the cheapest. It is not be necessary to hire a lawyer of high quality. Make sure people in your circle of friends and the BBB. You could even attend a court hearing and observe lawyers handling their cases.
When you do file for bankruptcy, make sure you know your rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. However, there are few debts that cannot be eliminated, like student loans and child support payments. If you are speaking to debt collectors about another type of debt and they tell you it cannot be discharged, check your local regulations. You can report the collectors to your state attorney general if they are lying about this.
Sometimes in life things just happen which are out of your control. Apply the advice from this article to help yourself better understand filing for bankruptcy. Use this information to make a fresh start!