Debt can have a devastating effect on your quality of life and financial future. Unfortunately, individuals can amass far more debt than they can reasonably pay off. When this happens, a vicious cycle can be created where individuals gradually fall further into debt.
Understand The Various Types Of Bankruptcy Protection You Can Seek
There is a misconception among many individuals that there is only one type of bankruptcy. However, there are many different types of bankruptcy protection that can be sought by individuals and companies. The type that will be best will largely depend on your goals for the bankruptcy along with the specifics concerning your debts and assets.
Know The Limits Of Bankruptcy
Bankruptcy can be an invaluable option for allowing you to escape debt. Yet, there are limits to the types of debt that can be discharged through the process of filing for bankruptcy. For example, tax debts are usually not dischargeable through bankruptcy, and the same applies to students loan debt as well. Debts that were secured with collateral are far more difficult to get discharged, but it may be possible in some instances.
Avoid Attempting To Hide Assets
It is vital for individuals to appreciate the need for them to be as open and honest as possible during the bankruptcy proceedings. Individuals may be tempted to try and hide assets to shield them from the bankruptcy proceedings. However, this can lead to serious legal issues. In addition to preventing the bankruptcy application from being approved, this could also lead to perjury charges. Additionally, this could lead to individuals being barred from being able to use the bankruptcy system in the future. Prior to meeting with your bankruptcy attorney, you should perform a comprehensive review of your finances so that you can have the most accurate information possible concerning your current financial situation.
Have A Plan For After Bankruptcy
After the bankruptcy proceedings are completed, individuals will want to make changes to the way that they manage their finances to avoid getting trapped under debt again in the future. As part of this process, undergoing credit counseling or financial education can help you with making smart choices as you look to rebuild your finances. Failing to be prepared to make these changes can result in you finding yourself needing to file for bankruptcy again relatively soon. Luckily, the courts or your bankruptcy attorney will be able to refer you to professional services to help you learn to avoid the need for bankruptcy protection in the future.
Contact a bankruptcy attorney for more help.