Too Many Bills? Too Little Money? Consider Personal Bankruptcy

Too Many Bills? Too Little Money? Consider Personal Bankruptcy

One of the most difficult financial decisions a person may have to make in their life is to decide to file for personal bankruptcy. With such a big decision, you should be sure to know as much about the process as possible. Use this information to help you know if it is the right course of action to take.

If you are planning to file for bankruptcy in the near future, don’t charge up your credit cards thinking that you won’t have to pay back the debt. In many states, there are rules about how much credit card debt and what kind, may be discharged in a bankruptcy. For instance, if you make purchases for luxury items, such as an expensive new TV, within 6 months prior to filing, you may be obligated to pay that amount back. On the other hand, if you used your credit card to purchase groceries, or other necessities, the rules may be different. Be sure to ask your attorney for advice.

In any personal bankruptcy filing, it is essential to make certain to list all elements of your financial life in your petition and other paperwork. Failing to include all income sources or omitting individual debts and accounts can lead to substantial problems down the road that can limit the dischargeability of some of your most substantial obligations.

If you are planning to file for bankruptcy, you do not need to lose your home, car or other items that you have loans for. If you wish to keep them, however, you must make the payments on a timely basis in order to avoid repossession. If the payments are too much to handle, your bankruptcy attorney may be able to arrange for an evaluation of your loan and negotiate a lower monthly payment. In the case of a home, you may look into a loan modification or refinance to reduce your payment amount.

See what you can find out. Each state does have varying laws on the subject of bankruptcy. Because of this, it is important that you meet with a specialized lawyer to discuss whether bankruptcy is right for you. Generally, initial consultations are free to you so you are able to determine which path you should head down at no cost.

You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you fail to do so, things could get ugly.

Now that you have been provided with some useful information about personal bankruptcy, carefully weigh your options. Making this decision is going to impact your life for several years. If you have considered all of the other options, carefully follow the correct steps to file for personal bankruptcy and prepare for what changes it will bring.

 

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