A lot of people see bankruptcy in a negative way, but it is really a good solution in certain situations. A quick change in an life, such as a divorce, can cause a situation that can only result in bankruptcy. If this has happened to you, the hints in this article may be of use.
Filing for bankruptcy is something many people are forced to do when there debts become too much of a burden, and they can no longer afford to pay them. If this sounds like you, start familiarizing yourself with your state laws. Most states differ in their laws governing bankruptcy. Your home is safe in some states, but in others it’s not. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Before you file for bankruptcy, carefully consider if it is the right option for you. There are other options available, such as credit counseling for consumers. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
If you’re filing for bankruptcy soon, be sure you are going to hire a lawyer. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. A bankruptcy attorney can help yo,u and make certain you can do things the right way.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. Your former ties with creditors will cease to exist. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. 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.
Consider Chapter 13 bankruptcy for your filing. With a consistent income source and less than $250k in debt, try filing for Chapter 13. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. There are qualifications, such as the loan being high interest and a good work record for this option.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Do not rely on your debtors information about whether or not certain loans can be included in your bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
You might have to file for bankruptcy if nothing else has worked for your financial situation. Don’t stress if your situation has made you decide to take this route. This article will provide valuable information for you.
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