When your debts get out of control, it’s common to start worrying about losing your possessions and assets that you care about most. You can stop calls from debt collectors and resolve your financial issues if you consider filing for bankruptcy. The following article contains advice to assist you in dealing with the process.
Personal Bankruptcy
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If this applies to you, be sure that you know what the laws of your state are. Each state has its own laws regarding personal bankruptcy. In some states, your home is protected, while in others it is not. Before filing for personal bankruptcy, be certain that you are familiar with the laws.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. This means using a credit card is not necessary, when it will just be discharged.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Penalties may include fines, imprisonment or denial of the filing. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Be aware of recent changes, if any, in the bankruptcy code. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. To learn about any changes, search the Internet or contact your state’s legislative office.
Be sure to weigh all of your options before deciding to file for personal bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Research them online to see the positive and negative aspects of each one. Once you have done your own research, be sure to review your findings with your lawyer, who is the expert. This way, you can be sure of making a well informed choice.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. It might be possible to consolidate some of your debt instead. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. Having a bankruptcy on your record will hinder your ability to get credit in the future. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Remember that missing a payment to the plan will result in your case being dismissed.
While going through this process, spend more time with friends and family. Bankruptcy can really wear down your emotional reserves. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. A lot of folks decide to hide themselves from the world around them until the end of the process. Do not isolate yourself or you will put yourself at risk for depression. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Even though bankruptcy is always a personal choice, do not file without checking out all other options. Keep in mind that debt consolidation offers can be scams that do little more than get you into more financial trouble. Keep these tips in mind so you can avoid debt in the future.
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