If you have finally come to the conclusion that your financial problems are not going to get better without you taking drastic action, such as filing bankruptcy, you might want to hold off for a bit longer. You should definitely file, but there are 3 issues that you might want to consider before you submit that federal paperwork. Read on to learn more.
1. Protecting your homestead exemption
A chapter 7 bankruptcy always has the potential to result in the loss of property, but exemptions are the "gift" of the bankruptcy code to filers. With a homestead exemption, you can deduct enough value off of your home to potentially keep it. No one wants to lose their home, so understanding what the homestead exemption means is vital.
Exemption amounts vary from state to state. For instance, if Texas gives you a homestead exemption of $10,000, nearby Oklahoma may give you an exemption of $25,000. If you are considering a move, be sure to research the impact it could have on your exemptions. It should be mentioned that other types of exemptions, such as vehicle and personal property, also vary by state. In some cases, you can use the exemptions in your former state after you have moved (for a certain period of time). http://www.nolo.com/legal-encyclopedia/bankruptcy-exemptions-state
2. Do you and your spouse have a troubled marriage?
Recent bankruptcy code overhauls may prevent some people from filing for bankruptcy at all, since the means test limits those with higher incomes from filing. Every state has its own income limits, based on the median income of that state. If you are contemplating a divorce, take some time to regard what the impact could be on your filing. You must take the income of your spouse into consideration, when performing the means testing, but if you are single, you may qualify to file based on your income alone.
3. Do you have a need to shed some property?
Tread carefully, but you are allowed to sell, transfer, or give away property, as long as you follow the rules. A consult with your bankruptcy attorney is vital, since going wrong here could have you in big trouble with bankruptcy courts for attempting to defraud. Whatever you do, be sure to keep all paperwork. For example, you can take cash from your savings account, which is an asset subject to seizure, and buy something that is exempt, like a car (as long as it will be your primary vehicle).
Speak with a bankruptcy attorney to learn more.
For more information, talk to companies like Clinger Richard S.