In the short term, bankruptcy is a negative experience. Bankruptcy can be a bad sign and can be embarrassing to tell others about in regards to your financial status. Read this article to learn more about bankruptcy and make the best decision.
You should avoid paying your taxes with credit cards and then immediately 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. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Avoid ever touching retirement funds until you have no other choice. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
When it comes to informing your attorney about your case, don’t be fearful. Don’t assume that he will remember something you told him weeks ago. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. 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.
Do not despair, as it’s not the end of the world. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Interview and research attorneys before choosing one to help you with your bankruptcy.
Personal Bankruptcy
Hire a lawyer if you plan on filing for bankruptcy. 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 personal bankruptcy attorney can help and guide you along through the bankruptcy process.
Learn all the latest laws before you file bankruptcy. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To learn about these changes, try contacting your state’s legislation office or checking their website.
Take steps to ensure your home is protected. Filing for bankruptcy doesn’t automatically involve losing your home. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Chapter 13 Bankruptcy
Consider filing using chapter 13 bankruptcy. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. Expect to make payments for up to 5 years before your unsecured debts are discharged. Keep in mind that missed payments will trigger dismissal of your case.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Bankruptcy is something you file for after considering all your other options. What you’ve learned from this article can put you on a corrective path, use it wisely. Apply the guidance you just received and see what it can do to improve your financial circumstances and bolster your credit record.
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