Bankruptcy: What To Consider When Filing

There are those who consider bankruptcy a situation for losers, but when it affects them personally, they change their tone. Illness, extended unemployment and other financial hardships can result in a devastating financial situation. Follow the advice presented here if this describes your situation.

Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Laws differ from one state to the other. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Become acquainted with local bankruptcy laws before filing.

Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. This makes using a credit care irrelevant, since bankruptcy will discharge it.

Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Penalties may include fines, imprisonment or denial of the filing. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.

Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. You don’t have to make your decision right after this consultation. Take your time, and schedule consultations with more than one lawyer.

Bankruptcy is a valid option to consider once you begin to run out of ways to keep your debts under control. Because circumstance can create financial issues that result in bankruptcy, you can rest easy. Apply the advice from this article to help ease your burden when filing for bankruptcy.

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