When you are thinking about filing bankruptcy, there are a lot of things you need to consider. Bankruptcy laws have changes a few times in the past few years, so it can be hard to know what to expect. Here are some helpful tips so that you have a better idea of how to deal with bankruptcy.
Be certain to gain a thorough understanding of personal bankruptcy by using online resources. The United States Department of Justice and American Bankruptcy Institute are two such places to look. The more you know, the better equipped you'll be to make the wise decisions needed for a successful bankruptcy.
A huge mistake people make before filing for bankruptcy is maxing out their credit cards. This can lead to disaster when you file and the credit card companies might not discharge the debt. If you can, you need to stop using your credit cards at least six months before you file, and ideally for a year prior. Also, do your best to pay the minimum payments on these cards for at least six months before you file.
Before filing for personal bankruptcy, make sure you are doing the right thing. You have other options, including consumer credit counseling help. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Don't feel bad if you need to remind your attorney about any specifics of your case. Don't just assume that the attorney will remember it automatically. Your case and future are affected by the attorney's action, so never be afraid to communicate.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. Many belongings may become eligible for repossession or seizure after filing for bankruptcy. This will ensure that you do not have any surprises once you have filed bankruptcy.
Find out the real reason you are filing for bankruptcy. What happened in your life that brought you to this place? What do you need to do to make sure that you can move on? What actions do you need to take before you can be sure that this will never happen again?
Stay up to date with any new bankruptcy filing laws. Laws are subject to change, and it's important that you're educating yourself about current code only. To stay up-to-date on these laws, check out your state's government website.
Make sure that you really need to file for bankruptcy. You might be better off consolidating your debt or availing yourself of some other remedy. There is not easy process associated with personal bankruptcy. It will have a major effect on your credit as time goes on. Because of this, you should be sure that bankruptcy is your only option before you file.
If you plan on filing bankruptcy, never wait too long. Some people just ignore the trouble they are in financially and think it will go away later. This is not a good decision. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. Consider all possible options before filing bankruptcy.
As you are heading towards a bankruptcy filing, don't be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
Try to file for Chapter 13 bankruptcy rather, than Chapter 7 if you can possibly do so. Chapter 13 is less detrimental to your credit because, you pay some of your debts back via a structured repayment plan rather than liquidating assets. In addition, you don't risk losing property in a Chapter 13 case.
If you see yourself racking up credit card debt again after filing for bankruptcy in the past you need to stop yourself before you end up back to square one. Cut up any credit card s that you have and get in touch with a credit counselor as soon as you can.
If you are avoiding personal bankruptcy but fear that you will lose your retirement savings, you should know that is not likely to happen. If you have an ERISA qualified retirement program (most are), then your retirement savings are safe from claims by creditors. This applies to funds in 401ks and to most IRAs. Consult your own bankruptcy attorney for specific details for your circumstances, but you should know the odds are in your favor.
Work with a reputable credit counseling agency. If you have decided to file for bankruptcy, work with a credit counseling agency that has the approval of the US Trustee's Office. They will provide a 90 minute mandatory counseling session, after which they will determine if you qualify for a Debt Management Plan. They will also issue you with a certificate that allows you to file for bankruptcy.
Prepare for life after bankruptcy by taking a seminar, class or workshop, in budgeting. Use the skills that you acquire to manage new debts that you incur, as well as, your day-to-day finances. Ideally, these skills will enable you to save money, repair your credit and avoid future bankruptcy declarations.
Decide which chapter of bankruptcy you need to file so you can retain as much of your assets as possible. Depending on your situation, filing a chapter 7 bankruptcy may be right for you, as you are able to keep most of your assets. However, other types such as chapter 13 may be better since you can restructure your debt into affordable payments.
There are a lot of things to know if you want to file for bankruptcy, especially if you are not a lawyer and don't know all of the bankruptcy laws. Use the tips in this article to keep you on the right path. Find out as much as you can, so you can start to improve your finances soon.