The decision to file for bankruptcy is very serious and should not be taken lightly. Read the ideas and advice in the following paragraphs so that you are aware of what to full expect and should think of prior to making such a crucial decision. Learn as much as you can beforehand.
Generally bankruptcy is filed when a person is facing insurmountable debt. If this is the case for you, you should begin to investigate the legislation in your state. Different states have different laws regarding bankruptcy. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Know what the laws are in your state before filing.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Don’t avoid telling your lawyer specific details with your case. Just because you have told him something of importance that he will remember it. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
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 lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Do not abandon hope. Once bankruptcy has been filed, you may be able to regain possession of items such as electronic goods or cars that were taken away from you. If your personal property was repossessed within 90 days before your bankruptcy filing, you may have a chance of getting it back. Get help from your lawyer to file a petition so you can get your items back.
You can take steps to hang onto your house. Filing bankruptcy does not necessarily mean that you will lose your house. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Don’t file for bankruptcy the income that you get is bigger than your bills. Understand that while declaring bankruptcy will eliminate many of your debts, you will have difficulty obtaining credit and will pay more in interest for the credit you do receive for at least seven years.
As you’ve read, bankruptcy isn’t as simple as it might sound. There is a long list of items you need to do, and make sure they are done correctly. When you implement the suggestions in this article, you can feel confident that you have covered all the bases with regard to bankruptcy filing.