Filing bankruptcy can be a frightening and overwhelming experience, even more so if you do not have a lawyer with the expertise and qualifications necessary to make the process easier for you. Before you make a final choice about bankruptcy, stopping to consider a few factors surrounding your choice is a good idea. Learn more about some of the most important considerations about filing bankruptcy.

Is Chapter 7 Or Chapter 13 Best For Your Financial Circumstances?

The type of bankruptcy you should file depends a great deal on how much income you have coming in and how much debt you owe. If you are not making enough money to pay any of your debts, you can file Chapter 7 and walk away from your debt once and for all. However, you must prove you do not any money left for debts after you pay for basic living expenses. Also, some states have different income/debt ratios when it comes to filing Chapter 7. In Chapter 13, you will need to have enough income to pay payments put together in a debt re-payment plan over a certain amount of time.

Think About The Assets You May Or May Not Be Able To Keep

Every state has its own set of rules about the property you can keep after filing bankruptcy. The property you own like clothing, stereos, televisions and furniture are usually not a concern of the courts and you are allowed to keep them. However, when it comes to your house and land, maybe even your vehicle, checking the laws in your state is a good idea before making a final choice about filing.

Income Taxes Matter

If you have failed to file taxes in the past two years, you may not be able to file bankruptcy. When you file for bankruptcy, your tax returns are used to determine your income and information about your assets. Bankruptcy cases are usually dismissed when filing parties are unable to produce their income tax returns for the two years prior to filing. For this reason, gathering your tax returns paperwork together before going to file is vital.

You may have plans to rebuild your credit after filing bankruptcy. Keep in mind that bankruptcy usually stays on your credit report for at least ten years, so making the choice to file for it is one you should consider seriously. If you have a plan in mind to remain financial stable during the ten years bankruptcy is on your credit history, it may be a good idea to go ahead and discuss your options for filing with an experienced bankruptcy attorney.

For more information, contact Hamby & Hamby, P.A. or a similar firm.