Personal Bankruptcy Advice For Those Who Need To File

| March 15, 2013

Nowadays, more and more people are facing the sad reality that they have no choice but to file for bankruptcy. Not only the economy, mind you, but people’s spending habits are also to blame for the increase in claims filed. However, before selecting this option make sure you know everything you need to know before you head too far down the path. If you read this article, you will learn what you need to know.

Keep an eye on any progress made by your attorney. Stay informed on what they are doing. Don’t hesitate to pick up a phone and call if you haven’t heard any news in a while or need something clarified. Mistakes can unintentionally occur in busy law firms, which is why it is important to keep on top of things yourself, just in case. Lawyers are not perfect, so do not be afraid to double-check their work as much as possible.

Credit Card

Do not use a credit card to manage your tax issues and then try to file bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.

Adopt a positive attitude toward filing for bankruptcy and researching the topic. Yes, it may be hard to admit the need for help, however, if you try to stall from getting help your situation can only worsen. Making use of a bankruptcy pro immediately can make the difference in success and failure in bankruptcy court.

If your paycheck is larger than your debts, avoid filing for bankruptcy. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.

Do not put off filing for personal bankruptcy. Once you have decided that you need to file bankruptcy, it is best to get on with it. Waiting will put more stress on you and will only make the financial situation much worse. Get things over with to avoid stress and other issues. The sooner you begin the process, the better.

To start rebuilding your credit after a bankruptcy, consider opening new lines of credit. While this is not an easy path to take, a secured credit card is a good place to start. These cards usually charge high rates, but there is a higher chance you would pay for a higher rate, given the bad credit rating that you have. One line of credit that is in good standing increases chances you may be eligible for other loans and credit cards.

Chapter 7

Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.

Keep in mind though that personal bankruptcy might prove a wiser choice for your credit history than keeping making late payments. It is true that a bankruptcy stays on your credit record for ten years, but you are freed to start improving your credit immediately. A fresh start is a great benefit of bankruptcy.

Check out your state and local laws on bankruptcy prior to filing. Review your outstanding debt load and determine which obligations might be eligible for a bankruptcy discharge. There are debts that are not dischargeable. For example, a credit card debt consisting of nonessential purchases incurred within three months of the bankruptcy declaration cannot be discharged. Check the laws in your state.

When consulting with your bankruptcy lawyer, be sure to disclose all of your significant debts. If you fail to disclose financial information, the court may delay, suspend or deny your petition for bankruptcy.

Don’t drag your feet when it comes to filing bankruptcy. Many people simply try to ignore their financial troubles, hoping that they will somehow go away, but this is a huge mistake. It is easy you to lose control of your debt, and avoiding the problem will make things worse. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.

Be aware of recent changes, if any, in the bankruptcy code. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To learn about these changes, try contacting your state’s legislation office or checking their website.

You need to look over all your bankruptcy options and choose the best one for you. There is more than one type of bankruptcy. Do your homework on the subject of bankruptcy prior to filing any paperwork. Consider the pluses and minuses of each type of bankruptcy and seek out the advice of a financial adviser.

Chapter 7

You need to educate yourself on the differences between Chapter 7 and Chapter 13. In Chapter 7 most of your outstanding accounts will essentially be erased. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.

As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. To make sure the best decisions are being made in terms of bankruptcy, use this advice.

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