Are you so far in debt that you may have to file for bankruptcy? If so, you have come to the right place. The Internet, and this article in particular, is full of great advice for navigating the complexities of bankruptcy. Read on to learn how to avoid bankruptcy.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. A common rule is that dischargeable tax means dischargeable debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Never give up. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. If your personal property was repossessed within 90 days before your bankruptcy filing, you may have a chance of getting it back. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
Protect your home. Bankruptcy doesn’t always mean you’ll lose your home. There are mitigating factors, such as lose of value, or multiple mortgages. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Unsecured Debt
If you are going to be filing for bankruptcy, think about filing Chapter 13. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Keep in mind that missed payments will trigger dismissal of your case.
Once your bankruptcy filing is under way, take the time to decompress a little. It’s easy to be stressed during this time. Depression can ensue from the stress if action isn’t taken. You must realize that things will get better over time.
Make sure that you act at the appropriate time. Timing is everything, especially in personal bankruptcy filings. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
Review bankruptcy rules before you file your petition. You want to understand what is going to happen when you file for your specific case. If the regulations are not followed, your case may be subject to a dismissal order. Thoroughly research bankruptcy before you make the decision to file. This will ensure your bankruptcy will go smoothly.
As you are heading towards a bankruptcy filing, don’t be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. This could be considered as fraud, and you may even be forced in paying all of it back to credit card companies.
It is important to understand that a bankruptcy more beneficial to your credit than multiple overdue or missed payments on debt. Your credit report will show your bankruptcy for the next ten years, but it will also allow you to start working towards repairing your credit immediately. One of the nicest things about bankruptcy is that it gives you a fairly fresh start.
Lots of individuals who previously filed bankruptcy vow to shun the use of credit cards or lines of credit in the future. Since using credit responsibly is the only way to improve your credit score, this is not such a good idea. If you do not rebuild your credit rating, you will not be able to buy a car or a home on credit again. Keep it simple with one card and take a slow approach to rebuilding.
Credit Reporting
Once your bankruptcy is over, request a copy of your credit report from all of the credit reporting bureaus. Make sure that the report accurately represents your discharged debts and closed credit accounts. If you find any errors, contact the credit reporting agency to get them fixed immediately for the sake of your credit rating.
Remember to include all the debt that you want to eliminate when you file your bankruptcy papers. If you fail to include a debt in your filings, you will still owe it when your bankruptcy is discharged. It is up to you to ensure all things that need to be taken care of are written down, otherwise you will be stuck paying on things that weren’t discharged.
If you’re in financial trouble, you may want to rethink getting a divorce. The economic stress of a divorce can be the final blow leading to bankruptcy and this situation may be avoided. Thinking divorce through is the smart thing to do.
Planning can make all the difference in the world. Any steps you take that give you additional time to address your debts are good ones. That said, this only makes sense if you are making progress in solving your financial problems. So put pen to paper and come up with a plan that will put your future back on track.
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