The economy is bad looking these days. A poor economy means more people than ever have debt and are losing their jobs. The unfortunate result of this is that more and more people are filing for personal bankruptcy. If you’re in danger of going through bankruptcy, then the below article can help you in getting out of it.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. Study the laws in you state to learn what you need to do and what your options are. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For instance, your home might be protected in some states while you might lose it in others. Be aware of bankruptcy laws before filing your claim.
One of the best ways to learn more about the bankruptcy process is to hit the Internet and look up reputable bankruptcy websites. The United States Department of Justice and American Bankruptcy Institute are both sites that provide free advice. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
Credit Card
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Should the tax be dischargeable, the debt is often dischargeable as well. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. No matter what you do, do not touch your personal savings unless there is no other option. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Chapter 7
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 involves the elimination of all of your debt. Any ties you have concerning creditors will definitely be dissolved. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Make sure your home is safe. You do not have to lose your home in the process of a bankruptcy. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Before filing bankruptcy consider every available avenue. Many times a consolidation loan will ease your financial struggles. Bankruptcy cases are long, anxiety-filled experiences. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
Even though the economy is slightly getting better, so many people do not have jobs or are not getting paid enough. If you lack a steady job, you still may be able to prevent the need for a bankruptcy filing. Hopefully this article has provided you with some tips to keep yourself, or someone else, from having to file for bankruptcy. No matter how bad things seem, there is hope for you, good luck.
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