These days, the word “bankruptcy” is about as common as the word “the.” The economy has hit many people from all walks of life hard. However, before you make the decision to file for personal bankruptcy, you should understand the filing process and thoroughly investigate whether it is the right choice for you. The following tips are going to help clarify some bankruptcy confusion for you.
After filing for bankruptcy, check your credit report to make sure that it was reported the way that it should have been. You want to make sure that any debts that were part of your bankruptcy are now labeled “BK” so creditors know you no longer owe that money.
Trying to exclude family members you owe money to before filing for personal bankruptcy can get you into serious hot water. The court will look into who you pay-off as far as a year back, and if they find you showing favor to family over other creditors, they could invalidate your filing completely.
A great tip for filers of personal bankruptcy is to thoroughly prepare for the initial meeting with the bankruptcy attorney. By assembling every piece of relevant financial documentation, including mortgage documents, auto finance agreements, credit card statements, tax records and bank statements, you can be certain that your bankruptcy petition and supporting documentation includes all information required for a comprehensive filing.
Become educated about personal bankruptcy. You must realize that the IRS will tax forgiven debt in a bankruptcy. The rules can be confusing, so be sure you learn all that you can before you file. You can find out more about this by doing some research, either by talking to finance professionals or looking online.
As mentioned earlier, because of the poor economy, bankruptcy filings are more common than ever. By following the advice presented here, you can make sound decisions in regards to your relationship with personal bankruptcy.