Filing for personal bankruptcy is an important step, which should be thought through carefully. Read this article to find out more about personal bankruptcy and get the information you need to make an educated decision. Educate yourself as much as possible prior to taking action.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. All creditor relationships will be severed. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Because of this, transferring the debt to your credit card is pointless.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most attorneys offer free consultations, so meet with a number of them before you retain one. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. It is not necessary to make a final decision right away. You can take as much time as you need to meet with different lawyers.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
The article you have just read explains a few different methods you can use when filing for bankruptcy. Many things have to be done properly. Hopefully, with what you learned today, you learned what it means to file for bankruptcy and you can avoid being in this situation in the future.
