Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this is the case for you, you should begin to investigate the legislation in your state. Bankruptcy laws vary from state to state so it is important to do your research. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. It is important to understand the laws in your state before filing for bankruptcy. Research your options before declaring bankruptcy. If you have decided to file for personal bankruptcy, you might be tempted to try doing it on your own, rather than paying an attorney. If that is your choice, you have to be sure you are educated about the bankruptcy laws. When people do their own personal bankruptcy, it is very easy to overlook important details and make errors that could prevent your debts from being fully discharged. Make sure to do every step correctly so this does not happen to you. Before your first meeting, make a list of questions you have for the bankruptcy lawyer. Lawyers charge a lot for their time. For the sake of their time and your money, have all the questions and concerns ready to bring up. Be certain that you understand everything that is happening in regards to your bankruptcy case.
Do not make the assumption that every dollar of debt will be disscharged in a Chapter 7 case. Secured debt will have to be reaffirmed, meaning you must come up with a brand new agreement which shows a new payment plan, while other debts you cannot discharge. For example, you can’t discharge court-sanctioned fines, child support obligations or alimony payments via Chapter 7.
Once bankruptcy has been done, open new credit so you can rebuild your history. That can be hard with poor credit, but a viable option is a secured credit card. You will see high rates on these cards, but this is going to be the case with any credit you get at this time. If you can begin to rebuild your credit slowly, you will eventually be able to completely erase the bad and replace it with the good.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy. It is possible to attempt to file bankruptcy and yet be denied, so you need to have a plan B in case that happens. If you are prepared prior to going in, it will be easier for you to anticipate the things that could happen if ever you are denied.
Don’t throw in the towel. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Speak to a lawyer who will be able to help you file the necessary paperwork. Normally, you will not lose your assets when filing bankruptcy. Personal property is exempt from bankruptcy claims. Some included items are: electronics, household furnishings, clothing and even jewelry. Depending on the state you are from, what kind of bankruptcy you’re filing, and your specific case, you could be allowed to keep bigger items, like your car or house.