Understanding What A Personal Bankruptcy Means For You

July 25, 2013

TIP! Most people end up filing for personal bankruptcy because they owe more than they make. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws.

Filing for bankruptcy can be difficult, but in the end it can actually make your life easier. On the one hand, you have to go through all your finances and deal with many people going through your financial life. Bankruptcy has a positive outcome since the collection calls will stop. The following are some useful ideas for facilitating a smooth bankruptcy.

TIP! You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards.

Try to make certain you are making the right choice prior to filing your petition. You have other choices, including consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.

TIP! If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. You may not know everything you need to know in order to have a successful outcome of your case.

Investigate any new laws before deciding to file a bankruptcy. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.

TIP! Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor.

Safeguard your home. Filing for bankruptcy does not always mean you will end up losing your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You are still going to want to check into homestead exemption either way just in case.

Chapter 13

TIP! Ensure that you bankruptcy is your best choice. Sometimes consolidating your existing debts can make them more manageable.

Find out more about Chapter 13. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.

TIP! Find out more about Chapter 13. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000.

There are positives and negatives when you file bankruptcy. No matter what your reason may be for going through with it, you need to know as much as possible about it before you begin. These tips can make dealing with bankruptcy easier. Use the above tips to see positive results when filing for bankruptcy.