Bankruptcy: Everything You Need To Know Before You File

You’ve heard it before and you’ll hear it again–the economy is in rough shape. A poor economy means more people than ever have debt and are losing their jobs. High debt often leads to the miserable state of bankruptcy. This article can help you or someone you care about if bankruptcy is a consideration.

Most people end up filing for personal bankruptcy because they owe more than they make. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Bankruptcy rules vary by jurisdiction. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be sure you educate yourself on local laws prior to filing.

Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Bear this in mind; if the tax can be discharged, then the debt can be as well. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.

When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Avoid ever touching retirement funds until you have no other choice. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.

Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.

You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. The professional that helps you file for bankruptcy has to have a complete and accurate picture of your financial condition. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.

Before filing for bankruptcy, hire a qualified attorney. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. A bankruptcy attorney can advise you on how proceed properly.

The economic recovery has bypassed many people, leaving their finances in disarray. Even if you do not have a steady income, there are steps you can take to prevent bankruptcy. You hopefully have more knowledge now on how you can avoid bankruptcy. Hopefully, you have the best luck.