Handy Tips On When You Should File For Bankruptcy

By Steve Lamban


If you are in debt and on the verge of filing for bankruptcy, then do not worry any longer. There are countless resources available online to help you avoid the ruins of going through a bankruptcy. This article can help you take steps to avoid bankruptcy, and how to handle it if you must file.

If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. You should always keep money saved for worse times. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.

Never lie about anything in your bankruptcy petition. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.

When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. You should never touch your retirement accounts, unless you have absolutely no choice. 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.

Do not abandon hope. If you've had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If the property you own has been repossessed under 90 days before the bankruptcy filing, you may still be able to get it back. Consult with a lawyer who can advise you on what you need to do to file a petition.

Stay positive. Bankruptcy might help you get back things you thought you'd lost and had repossessed, such as electronics, vehicles and jewelry. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Talk to a lawyer for help with the petition filing process.

No good will come of trying to conceal your assets or your liabilities in the bankruptcy process; you want to be scrupulously honest when you declare bankruptcy. Your attorney and trustee should be privy to all information about your finances. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.

Your most important concern is to protect your home. Filing for bankruptcy does not mean you have to lose your home. If your home has significantly depreciated in value or you've taken a second mortgage, it may be possible to retain possession of your home. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.

If you can afford to pay your bills, bankruptcy is not a wise option. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.

If you make more money than what you owe, filing for bankruptcy is not a good option. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.

If you really want to keep your vehicle, speak with your lawyer about possible choices. Chapter seven bankruptcy often provides for the lowering of payments. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.

When you file for bankruptcy, you should be very aware of your rights. Do not take debt collectors at their word when they tell you that a specific debt can't be discharged through bankruptcy. There are, indeed, some debts that cannot be bankrupted. Among them are student loans, child support and alimony payments. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.

Planning can make a big difference. It's best to take as much time as possible. That said, this only makes sense if you are making progress in solving your financial problems. Once you have a plan, you'll be ready for whatever happens.




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