If your car or other valuable items are about to be repossessed due to back taxes, you are probably quite afraid of what will happen. Filing for bankruptcy can help ease your financial burdens and put an end to harassing phone calls from debt collectors. Keep reading for useful tips to help you through the process.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. If the tax can be discharged, so can the debt. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement funds should be avoided at all costs. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. Not only is hiding income and assets wrong, it is also a crime.
Check the accuracy of all information before it is filed. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. Don’t fear speaking up since it affects your case and future.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Do some research about these options so you can choose the best one. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
After you have finished with the initial process of filing, you can relax and take a breather. It’s not uncommon to be overwhelmed by the filing process. Stress easily leads to depression, if you are not maintaining control of your emotions. You must realize that things will get better over time.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. It is possible to get your car payment lowered if you file using Chapter 7. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
If you have to file for bankruptcy, ensure that you supply all your financial information. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Add absolutely everything to your list, including small amounts. That may include secondary jobs, any cars or trucks you want to be considered assets and any current loans.
Pay attention to how you satisfy any personal debts before filing for bankruptcy. The laws surrounding bankruptcy often prohibit paying back certain creditors up to ninety days prior to filing, and family members up to a year! Before making important decisions in regards to your finances, be sure you understand the laws.
You should keep in mind that in the long run, bankruptcy can have a more positive impact on your credit score than continually missing payments towards your debt. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. Bankruptcy can give you the fresh start you need.
Don’t believe the myth that declaring bankruptcy means you lose everything you own. You can often keep personal property. This will include things like clothes, jewelry and electronics. What you are allowed to keep depends on the laws of your state, the chapter under which you file for bankruptcy and how much money you owe to your creditors.
Make a list of all your debts. You need to gather every debt you know you have, because this list is the starting point for a bankruptcy filing. Write down the exact amount. Don’t just guess. This process should not be rushed; the numbers should be exact.
If you must file for bankruptcy, think about hiring a bankruptcy lawyer. Your lawyer can determine if you eve need to file, and if you do, act as an advocate in court and make the process go more smoothly. Your lawyer could also help you with filling out paperwork and can also teach you how to answer questions.
Check out every other possible solution before settling upon the idea of filing for personal bankruptcy. You should also know that some debt consolidation firms are little more than scams that will only hurt your financial situation further. Keep these tips in mind to make the best choices for your financial future and to avoid worsening your debt.
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