What To Know Before You File For Bankruptcy

TIP! Don’t look at bankruptcy as a first step. Look at all the other options you may have first.

And it goes without saying that whatever brought you to bankruptcy was probably an unhappy experience; nonetheless, when your bankruptcy proceedings are over, you can move on to have a happier life. The main point is to start over financially. Continue ahead to learn how you can smooth out the bankruptcy process so it’s not a financial disaster.

TIP! Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end.

Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The United States Department of Justice, American Bankruptcy Institute, along with many other websites can provide you with the information you need. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.

TIP! Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. One example would be that a consumer credit program for counseling if you have small debts.

If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. If the tax has the ability to be eliminated, the debt can be too. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.

TIP! A lot of bankruptcy attorneys will let you have a consultation, so try several out. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal.

Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. 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.

Unsecured Credit

TIP! Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you.

After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. This being the case, look at secured card options. This demonstrates to creditors that you are making a good faith effort to repair your credit. Then, in time, it may be possible for you to obtain an unsecured credit card.

TIP! Before you file for bankruptcy, make sure you absolutely need to. You may be able to get away with going through debt consolidation to help make the payments easier to deal with.

Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in the yellow pages. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.

TIP! Consider Chapter 13 bankruptcy, if you chose to file. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you.

Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. Penalties may include fines, imprisonment or denial of the filing. Divulge all of your information so that you and your lawyer can devise the best strategy for dealing with your situation.

TIP! Do not forget to enjoy life a little once you get through the initial filing process. Many people feel a lot of stress while they work through the bankruptcy process.

Keep working to improve your situation. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. If the property you own has been repossessed under 90 days before the bankruptcy filing, you may still be able to get it back. Speak with your attorney about filing the correct petition to get your property back.

Interest Rates

TIP! If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. This is harder.

It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. Loan modification can help you get out of foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.

TIP! Do not put off filing for bankruptcy. Some people think that by ignoring financial problems, they will just disappear.

If keeping your vehicle is of great concern, ask your lawyer if you can secure a payment modification. In many cases, Chapter 7 bankruptcy can lower your payments. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.

TIP! Before you file, make sure you understand the laws as much as possible. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? In addition, it is unlawful for the filer to increase the amount of debt they are carrying on their credit cards right before they file.

Make sure you understand your rights as you file for bankruptcy. Bill collectors will lie to you and say you can’t have their bill discharged. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.

TIP! Some lawyers offer a phone number that you can give creditors when they call you about your delinquent account. You can just give them the number and they can call for confirmation that your debt is indeed part of a bankruptcy.

Quickly decide to start being more fiscally responsible prior to filing. Avoid running up current debts or taking on new debt just before filing for bankruptcy. When creditors and the judge are deciding on your case, they will consider your current credit history as well as your past credit mistakes. Your present handling of your finances will show that you are doing your best to change bad habits.

TIP! If a mistake causes your case to be dismissed, you may re-file. Be aware of the fact that automatic stays are usually only for a month following the date on which you file.

Contrary to popular belief, you won’t necessarily lose your assets if you happen to file for bankruptcy. Personal property can be kept. You can keep your clothes, your furniture, your jewelery and your primary vehicle for instance. While this varies based on the laws in your area, your particular circumstances and the kind of bankruptcy you choose to go with, it may be possible to keep big-ticket items like your automobile or even your residence.

TIP! Check for accuracy. Even if you have a lawyer to do that work for you, you are the one who has to make sure your information is correct.

The road to personal bankruptcy is a sad and difficult one. However, once this chapter is written it is done and you can begin to start fresh. Try using the tips in this article so you can make bankruptcy into the most positive experience possible.