If you decide to file for personal bankruptcy, do not panic and assume that you will be homeless with nothing to your name. Always speak with a lawyer when you owe money that you cannot pay. Read this article for more tips on how to handle your personal bankruptcy situation.
If you are being faced with home foreclosure, wage garnishments or other situations that make it necessary to file for bankruptcy quickly, you may want to explore an emergency filing. Regular bankruptcy filings entail approximately 50 pages of paperwork and one to two weeks for an attorney to pull everything together. In an emergency filing, your attorney can file just the first 2 necessary pages and keep creditors from continuing foreclosure or garnishment proceedings. The rest of the work will be completed afterward.
If you are planning to file for bankruptcy in the near future, don’t charge up your credit cards thinking that you won’t have to pay back the debt.
In many states, there are rules about how much credit card debt and what kind, may be discharged in a bankruptcy. For instance, if you make purchases for luxury items, such as an expensive new TV, within 6 months prior to filing, you may be obligated to pay that amount back. On the other hand, if you used your credit card to purchase groceries or other necessities, the rules may be different. Be sure to ask your attorney for advice.
Remember you still have to pay taxes on your debts.
A lot of people don’t realize that even if their debts are discharged in the bankruptcy, they are still responsible to the IRS. The IRS usually does not allow complete forgiveness, although payment plans are common. Make sure to find out what is covered and what is not.
Find out the real reason you are filing for bankruptcy.
What happened in your life that brought you to this place? What do you need to do to make sure that you can move on? What actions do you need to take before you can be sure that this will never happen again?
Know what debts can be forgiven. You may hear that you have to pay a certain debt and that it cannot be discharged, but that information will usually be coming from a bill collector. Student loans and child support and a few other debts cannot be discharged, but most others can.
Consider filing Chapter 13 rather than Chapter 7, if you are facing foreclosure.
A Chapter 13 bankruptcy allows you to create a restructured payment plan which includes your mortgage arrears. This will allow you to get your mortgage payments current so that you won’t lose your home. Chapter 13 doesn’t require you to turn over property, so you don’t have to worry about the homestead exemption, either.
Consider seeking advice in an online forum before you make any permanent decisions regarding personal bankruptcy. From there, you will see many people who long ago went through what you are now facing. It can give you a great perspective to help avoid making their same mistakes and learning their lessons without first suffering those consequences.
Be sure you know how Chapter 7 and Chapter 13 differ. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. Any ties that you have with creditors will be dissolved. Filing Chapter 13 differs by requiring you to agree to a 60-month plan to repay your debts before they are totally eliminated. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Always protect your house. It isn’t inevitable that you will lose your house when you file for bankruptcy. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Always hire an experienced bankruptcy attorney before filing for bankruptcy. Bankruptcy is a lengthy, stressful process. A good attorney can make the process as fast, and painless as possible. Opting to file for bankruptcy without first seeking legal advice from a good attorney, could result in your bankruptcy petition being thrown out of court by a judge.
Visit your primary care doctor for a complete physical prior to filing for bankruptcy. If you wait until after you begin the process, you will not be able to claim your medical bills on your bankruptcy. This is especially helpful if you do not have any kind of health insurance.
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
If you are getting sued and filing for bankruptcy, you may need to buy some time for the summary judgment to come through. If this is the case, pay a filing fee to buy some time. Mail a letter to the opposing side stating “I dispute the validity of this debt.” That will buy you more time.
A good personal bankruptcy tip is to be, careful about what you post online. Something as harmless as Facebook can came back to haunt you if, you’re planning on filing for bankruptcy. Lawyers have been known to check Facebook profiles in an effort to determine whether they’re committing adultery, or have hidden assets.
Many times people feel forced into filing for bankruptcy.
They do not know that debt settlements are available. If your debt is much greater than your income, you could be a candidate for a debt settlement. Many times credit counselors can negotiate with banks and credit card companies to reduce the amount you owe so that you do not have to file bankruptcy.
Always make sure that you have a support system in a tough time like personal bankruptcy. Panicking is very common for debtors. Remember, the tips in this article so you can finally get your finances back in order and avoid dealing with debt collectors.