When you are thinking about filing for bankruptcy, there are a lot of things you need to consider. Bankruptcy laws have changed a few times in the past few years, so it can be hard to know what to expect. Here are some helpful tips so that you have a better idea of how to deal with bankruptcy.
Keep your debts to a minimum prior to filing.
If you are planning on filing for bankruptcy, don’t run up your debts. Your recent history will be checked by judges and creditors, and if it is deemed that you are trying to cheat the system, you may not be able to wipe out those debts. You will be viewed most favorably if you can demonstrate that you have changed your spending habits.
Try to make certain you are making the right choice prior to filing your petition.
You can also avail yourself of other options, such as consumer credit counseling. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
If you have student loan debt, you’ll need to prove that paying your student loans would constitute an undue hardship in order to get it discharged. Gather all of your financial documents and draw up two budgets: one that includes student loan payments and one that does not. That way you can more easily demonstrate that paying your student loans would interfere with your financial recovery.
No good will come of trying to conceal your assets or your liabilities in the bankruptcy process; you want to be scrupulously honest when you declare bankruptcy. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Make sure that you know which, or your assets you will lose when you declare yourself bankrupt.
While filing for bankruptcy may seem like a great way to clear the slate and start again with your finances, you need to understand that most of your assets will be seized during the process.
Find out the real reason you are filing for bankruptcy. What happened in your life that brought you to this place? What do you need to do to make sure that you can move on? What actions do you need to take before you can be sure that this will never happen again?
If you are trying to rebuild credit after filing for bankruptcy, you should apply for secured credit cards. These can help you establish credit, but you have to make sure that they are one of the companies that report to the major credit bureaus since all of them do not.
Know what debts can be forgiven.
You may hear that you have to pay a certain debt and that it cannot be discharged, but that information will usually be coming from a bill collector. Student loans and child support and a few other debts cannot be discharged, but most others can.
There are a lot of things to know if you want to file for bankruptcy, especially if you are not a lawyer and don’t know all of the bankruptcy laws. Use the tips in this article to keep you on the right path. Find out as much as you can, so you can start to improve your finances soon.
