You will feel at your lowest point in life when your negotiations with creditors have failed, foreclosure proceedings are underway, and repossession of property is imminent. In this situation, no matter how small your bills are, your income may not be enough to cover all of them. It is time to consider filing for bankruptcy if you have reached a similar point in life. However, bankruptcy laws have evolved and people are constantly finding it hard to file. Some of the things to consider when filing for bankruptcy are discussed in this post.
You should disclose your assets, income, and expenses in your petition when filing for bankruptcy. When you disclose your income, you are in a good position for a debt discharge. It shows that you are honest and you will be allowed to proceed with making payments for debts that have the highest priority. If you do not disclose your income, you might lose the right to a discharge of debt as well as face criminal charges.
When repaying debts, do not withdraw funds from your retirement account when you have run out of cash. Retirement funds are among the assets and income sources that are protected by the bankruptcy laws hence you should not use it to offset a debt. Weigh all the negatives and positives of using up these funds before you withdraw anything. It is advisable to file for bankruptcy when you cannot repay debtors other than use your savings and remain without anything.
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The aim of bankruptcy is to discharge your debts hence you shouldn’t raise a red flag by transferring ownership of your assets to family members. These transfers will be looked into and in some cases considered to be an attempt to reduce your assets. In the instance that you are found to be cheating by transferring your wealth, then your right of discharge will not be awarded by the court.
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Don’t use credit cards close to the time you are filing for bankruptcy. Using credit cards at this particular time is an indication that you know you aren’t capable of repaying the amount you are borrowing. When you use credit cards yet you aren’t able to repay your debts, it shows that you are doing this intentionally and this decision might end up leading to major complications in your case. When you do the things mentioned above, you will be in a good position to file for bankruptcy successfully. After all, bankruptcy isn’t the end of life and you will have a change to reorganize your finances.