There is no doubt that the current economy is a challenging one. Because of the state of the economy, a lot of people have been let go from their jobs and have acquired debt. And these debts get to the point where people end up filing for bankruptcy. If a family member or a loved one is on the verge of filing for bankruptcy, the following article can help you understand more about the process and whether it offers an appropriate solution.
Always be honest if you file for bankruptcy. If you hide something, or neglect to add all of your information you could be denied. Disclose income and assets that are relevant to everything going on. This demonstrates good faith on your part and will help the court to rule properly.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Think about all the choices available to you when you file for bankruptcy. Before filing, talk with an attorney who can help you weigh all of your options. Loan modification plans on home loans are a great example of this. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Most creditors will be willing to work out an option to avoid not getting paid at all.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. This is illegal. It's fraud, and you can still be responsible for paying it back even after declaring bankruptcy.
Be honest when filing for bankruptcy. Don't hide liabilities or assets, as they'll come back and haunt you. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Divulge all of your information so that you and your lawyer can devise the best strategy for dealing with your situation.
Educate yourself as much as possible before filing for bankruptcy. Analyze your situation when it comes to debt as you determine which type of debt can be easily discharged under bankruptcy. Some debts, including credit card charges for luxuries, may not be discharageable if they were made less than three months prior to the filing date. Remember to research the laws that apply to your state.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Leave your retirement accounts untouched unless there is absolutely no other alternative. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Before your appointment with your bankruptcy attorney, jot down any questions that you can think of. The time of an attorney can be costly. To save yourself both money and a lot of trouble, make a detailed list of your concerns and questions prior to consulting your lawyer. Let the attorney know that you don't understand his or her answers if that is the case.
If you are unable to get a homestead exemption when filing for Chapter 7, you might consider filing for Chapter 13 bankruptcy to cover your mortgage. Your attorney should be able to tell you whether it is advantageous for you to convert your Chapter 7 filing into a Chapter 13.
It's important that you understand that bankruptcy is not a way to get out of paying tax debt. It's not uncommon for some people to assume they can pay the tax amount owed with credit cards, and then use bankruptcy to hide behind. For some reason people think that they are not paying taxes when they use a credit card. The laws governing bankruptcy forbid this practice and you will be left with both your tax and credit card debt.
Even though the economy is slightly getting better, so many people do not have jobs or are not getting paid enough. If you don't have steady income, you might still be able to avoid bankruptcy. Simply remain persistent and positive. Opportunities will eventually come your way. Keep these thoughts close and it will enable you to have a better chance of avoiding the need to file bankruptcy. Also, try to remember that tomorrow provides you with a fresh start.
Chaitanya Patel is web content writer by profession. He writes articles regarding legal topics like somekeyword and everything about the law.
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