How To Decide When To File Personal Bankrupcy

 

Many people these days have fallen deep in to debt. If you are in this situation and do not take take action, things will only get worse as collection agencies try getting their money. If this description applies to you, you may wish to think about filing for personal bankruptcy. Continue reading this article so you can figure out if this is something you should do.

If you are filing for bankruptcy, be sure you are being honest, no matter how dire your situation is. It is never a good idea to lie about debt or assets. This is not legal. Lying about your assets and debts could get you a lengthy prison stay.

When you consult a bankruptcy lawyer, bring a written list of questions with you to the consultation. Attorney’s are costly so be sure to get a free consultation to interview several lawyers before you hire one. For the sake of their time and your money, have all the questions and concerns ready to bring up. Make sure you fully understand the entire bankruptcy process.

If you find a job right before filing your bankruptcy papers, and finally have a steady income, you may still want to file for bankruptcy. It is possible that bankruptcy is still your best course of action. The timing of your filing can lead to a more favorable bankruptcy resolution. Post your filing before you begin earning money at your new job. In this way, your repayment means will be determined using your income prior to your new employment.

Before you file, you have to quickly think to be more responsible fiscally. Do not increase current debt or incur new debt prior to bankruptcy. Both creditors and judges take a look at what you are doing now, as well as what you have done in the past. Your most recent behavior should show that you realize the error of your ways and have changed course to become more fiscally responsible.

Student Loans

You may have a hard time filing for bankruptcy if the majority of your debt is from student loans. The rules are different in many states, but student loans are some of the most difficult types of debt to get discharged. You can get out of paying your student loans in a few situations, for instance, if the job you want to school for does not exist anymore.

It is important to understand that a bankruptcy more beneficial to your credit than multiple overdue or missed payments on debt. Yes, the bankruptcy will stick around for a whole ten years, but the clean slate you get from filing will help you get back on the right track quickly. One of the nicest things about bankruptcy is that it gives you a fairly fresh start.

Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Forgetting to add these may cause your petition to be delayed, or even dismissed. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. This financial information may include income from side jobs, vehicles you own and loans you have not paid off.

If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you aren’t aware of this, you could lose some assets that you value.

Bankruptcy is a difficult time that always leads to lots of stress. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Make your hiring decision based on several criteria, not just on price. While the person you select does not have to cost the most, they should be competent and reliable. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. You could even attend a court hearing to see how an attorney handles his case.

It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. This is harder. Before you can take out a new loan, you will have to clear it with your trustee. Document your budget to prove that you’re going to be able to make the payments. It will also be necessary to show why a new purchase needs to be made.

You are not alone when you are debating filing for bankruptcy. If you open your mind to this process and think clearly, it can lead to better financial situation and leave you in a much better position than before.

 
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01/01/2013