There are many different reasons why the debt could have piled up on you and became overwhelming. What’s important now isn’t how it happened but rather what you intend on doing in order to handle it. The main point is to start over financially. Continue ahead to learn how you can smooth out the bankruptcy process so it’s not a financial disaster.
Credit Card
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Should the tax be dischargeable, the debt is often dischargeable as well. This means using a credit card is not necessary, when it will just be discharged.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. There are plenty of other options open to you, like consumer credit counseling. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. Don’t allow yourself to be taken advantage of by predatory lawyers just because you are filing for bankruptcy. It is important to find someone trustworthy.
You should be able to meet with a specialized lawyer for free to ask your questions. Most lawyers offer free consultations, so talk to a few before making your decision. Only choose an attorney once all your concerns are answered to your satisfaction. It is not necessary to make a final decision right away. You can take as much time as you need to meet with different lawyers.
Consider other alternatives before filing for bankruptcy. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
Protect your house. There are many options available to help protect you from losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. 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.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Once the initial filing period is over, ensure that you are getting out and enjoying life. Many people who undergo this process become way too stressed out. This stress may lead to something worse like depression, so do what you can to fight that from happening. Your life will most likely improve once you’re over this hump, so relax.
Before you file, make sure you understand the laws as much as possible. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Also, you must never incur significant new obligations must prior to filing for bankruptcy.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Add every summer, no matter how insignificant, to your documentation. Include all jobs, assets and loans.
Know the laws and guidelines about bankruptcy before you formally file. There are some clauses within bankruptcy that could cause you upsets. Some mistakes could lead to having your case dismissed. Make sure you check into your case and see that you have the paperwork filled out correctly. This will make things easier in the long run.
It is possible that a bankruptcy might actually be smarter over the long term than struggling month to month with consistently late or missing payments. Bankruptcy can be seen on your credit history for 10 years, but you can begin repairing the damage immediately. One of the nicest things about bankruptcy is that it gives you a fairly fresh start.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. This isn’t necessarily a good strategy to follow because good credit is established by getting, and handling, credit responsibly. If you never use credit, you won’t be able to rebuild the good credit that you will need to make future purchases. Start by using just one credit card, and propel your credit in a positive direction.
Before you decide to file a bankruptcy claim, you need to first come to realization that it’s time to start living a more financially responsible life. In other words, you do not want to waste your efforts here by starting to ring up more and more debt. When looking at your situation, a judge will take both your past and current credit history into consideration. Every little bit of good financial behavior helps, so you should behave as responsibly as possible prior to filing.
Again, it is likely that whatever precipitated a bankruptcy filing was not something on which you look back fondly. Afterward, however, you can have an easier time. Actually, if you use the advice and ideas from this article, you will be able to turn bankruptcy into a turning point for your life.
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