Filing for bankruptcy is a complicated process. There are different chapters of bankruptcy, and the kind you select depends on your individual financial picture and what types of debt you have. This article will help you some of the important facts about bankruptcy.
Don't use credit cards to pay off your taxes if you're going to file bankruptcy. In many parts of the country, this debt will not be dischargeable, and you may still owe money to the IRS. This makes using a credit care irrelevant, when it will just be discharged.
Don't be afraid to remind your lawyer about any specifics of your case. Don't just assume they already know and that they'll remember something important details committed to memory or written down. This is your future in their hands, so never be nervous about speaking your mind.
Don't pay for the consultation and ask him or her anything you want to know. Most lawyers offer free consultations, so consult with many of them before picking which one you want to hire. Only make a lawyer if you feel like your questions were answered. You do not need to make your decision immediately after the consult. This offers you extra time to interview several attorneys.
Learn the latest laws before you file bankruptcy. Bankruptcy laws are always changing, so just because you knew the law last year doesn't mean that the laws will be the same this year. Your state's website should have the information about these changes.
Before you decide to declare bankruptcy, be sure you have considered alternative options. For example, a consumer credit counseling program may be a better bet if your debts are relatively small. You may also find success in negotiating lower payment arrangements yourself, just be sure any debt modifications you agree to are written and that you have a copy.
Chapter 7
Be certain that you know how Chapter 7 and Chapter 13 differ. Chapter 7 is the elimination of all of your debt. All the people you to creditors will disappear. Chapter 13 bankruptcy though will make you work out a five year repayment plan to eliminate all your debts.
You don't have to lose your home in the process of a bankruptcy. It depends what your home value is and if there is a second mortgage, or there is a second mortgage. You may also want to check into homestead exemption because it may allow you to keep your home.
Consider filing a Chapter 13 bankruptcy for your filing. If your total debt is under $250,000 in unsecured debt, Chapter 13 may be right for you. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that missed payments will trigger dismissal of your whole case to get dismissed.
That stress could lead to complete depression, if you don't take the right steps in fighting it. Life will get better once you finally get through this.
Debt Collectors
Know the rights when filing for bankruptcy. Some bill collectors will try to tell you your debt with them can not be bankrupted. There are very few debts, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If any debt collectors tell you that their debts can't be bankrupted, make a record of your conversation and report the individual to the proper state authorities.
Bankruptcy can cause anxiety and a host of stress. To avoid getting too stressed, look into securing a good lawyer. Do not solely on price. It is not be necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Make sure people in your referrals. You might want to visit a court hearing to see how an attorney handles his case.
Gain an understanding of bankruptcy law before you can. There are many pitfalls when it comes to the bankruptcy laws that could trip up your case. Some mistakes could lead to having your case being dismissed. Do as much research as possible about bankruptcy before taking the next step. The proceedings will be much easier when you move forward with awareness.
Now after reading the above article you see that bankruptcy must be thought over extremely carefully before going through with it. If you decide bankruptcy is right for you, take the proper precautions. This could be a new beginning and a clean slate for you.