How To File Bankruptcy The Correct Way

June 22, 2013

TIP! Consider all options before deciding to file for personal bankruptcy. Alternatives do exist, including consumer credit counseling.

Sadly, bankruptcy is an increasingly widespread phenomenon of late. Thank you, economy! Prior to taking the plunge and filing for bankruptcy, you need information to know if it is right for you, and if it is, what kind of bankruptcy to file. The following tips are going to help clarify some bankruptcy confusion for you.

TIP! Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.

Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.

TIP! Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Every one of your debts will be gone if you decide to go with Chapter 7.

Before filing for personal bankruptcy, make sure you are doing the right thing. Alternatives do exist, including consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.

TIP! Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. Be certain that the person you meet with is really a lawyer.

Always be honest with the information you give about your finances. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.

TIP! It is important to know how Chapter 7 filings differ from Chapter 13 filings. Spend time researching the advantages and disadvantages of filing for each one of these.

Find out what you exemptions are prior to filing bankruptcy. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you aren’t aware of this, you could lose some assets that you value.

TIP! Consider if Chapter 13 bankruptcy is an option. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income.

As you read at the start of this article, bankruptcy has become a very common process now due to the economy. To help you make good decisions regarding bankruptcy, consult with this article and use the knowledge to your advantage.