Dealing with bankruptcy is a very hard situation. When you are dealing with financial stress, you come to the realization there aren’t many options. However, there are some things that can be done to get what you want.
Get a plan in place for after your bankruptcy is over. Your debt will be forgiven, but you have to find a way to make sure that your financial picture will recover. Set definite goals so that you are always working toward a financial future that will never get you in this position again.
When you file for bankruptcy you limit your options for many future loan options. Many banks do not forgive bankruptcy and it shows on your credit report for 10 years. Think twice before making the decision to file for bankruptcy. You might want to defer your bills for a couple of months, instead of hurting your credit for 10 years.
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.
Be prepared to see your name in the news when you file bankruptcy. While the story isn’t going to make front-page headlines unless you are a very prominent or famous figure, all bankruptcy cases are public record. As such, they are often reported in a section of local newspapers. The good part is that not everyone reads that part.
Find out what the homestead exemption limit is in your state before filing for Chapter 7 bankruptcy. If you have too much equity in your home to qualify for the exemption, you could lose your house in the bankruptcy. You can’t change your mind once you’ve begun the process, so make sure you will be able to keep your home before you file.
Never pay to have a consultation with a lawyer, and ask a lot of questions. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Only choose a lawyer if you feel like your questions were answered. It is not necessary to come to a decision immediately following the meeting. You could even go to different lawyers for advice.
If you have filed for Chapter 13 bankruptcy, but realize that you are unable to meet your payment obligations, you may be able to convert to a Chapter 7 bankruptcy instead. To qualify for the conversion, you must never have converted your bankruptcy before and also undergo a financial evaluation. The laws surrounding this process are always changing, so be sure to talk with an attorney who can help you navigate this process.
Don’t put off bankruptcy forever. You might be better off filing early rather than juggling your debt for years. If you aren’t sure what to do, search for a nonprofit agency that helps consumers navigate bankruptcy. These experts can advise you about the best time to file and can share information about what to expect. Many of these agencies provide classes or workshops about managing credit as well.
Include all financial information when filing for bankruptcy. Things that may not seem significant to you may be very important. Include all assets like: vehicles, every cent of income, retirement account, stocks and anything else that has value. Furthermore, include any lawsuits that are pending against you or other parties.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. All of your financial ties to the people you owe money to will disappear. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. By law, paralegals and assistants can not give legal advice, so be sure that you are meeting with an actual attorney. Look for an attorney until you find one you feel comfortable with.
If you lose your job, or otherwise face a financial crisis after filing Chapter 13, contact your trustee immediately. If you don’t pay your Chapter 13 payment on time, your trustee can request that your bankruptcy be dismissed. You may need to modify your Chapter 13 plan if, you are unable to pay the agreed-upon amount.
Even if you go bankrupt, you do not need to be limited forever. When creditors can look at your credit report and see that you have made an effort, over time, to pay on time, getting credit will become easier again. Keep adding to your savings and you may be pleasantly surprised when you next seek a auto or home loan.
