Though making the choice to file bankruptcy is never easy, it is often essential. The best way to deal with the process is to become educated on the subject. Read on for knowledge and wisdom passed on from those who have gone through bankruptcy themselves.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more you know, the better prepared you will be to make the best decisions and ensure that your bankruptcy goes smoothly.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Always be honest with the information you give about your finances. Not only is hiding income and assets wrong, it is also a crime.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Don’t assume that they’ll remember something important later without having a reminder. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
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. The Bankruptcy Code has lists of various asset types that are exempt during the process. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Consider other alternatives before filing for bankruptcy. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 bankruptcy completely wipes out your debt. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. To make the wisest choice, you will need to understand the consequences of each of these two options.
Consider filing using chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Keep in mind that missed payments will trigger dismissal of your case.
Nobody wants to file bankruptcy, but some people cannot avoid it. Now, equipped with the information from this article, you can handle the process much more completely. By learning from others that have been in the same situation, it will make it easier on you in the long run.