Coping with the realization that you have to file bankruptcy is not any easy thing to do. The options available to you when your finances are challenged can be quite limited. Even if your credit score isn’t good, you may still find that there are ways to get a home loan or a car.
Most people end up filing for personal bankruptcy because they owe more than they make. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Bankruptcy laws vary from state to state. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. Because of this, transferring the debt to your credit card is pointless.
Credit History
Be sure you’re doing what’s right before you file for bankruptcy. Look into other options, such as consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Only make your decision if all your questions and concerns are adequately addressed. It is not necessary to decide immediately after your consultation. After your consultations, do some additional research on each attorney you consider qualified for the job.
Learn all the latest laws before you file bankruptcy. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. If you are not sure about the current laws all you have to do is look into what laws have been passed.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Be sure you go on the Internet and do your research to see what’s best for you. Before making any decisions, discuss the information you have learned with your lawyer.
See if your attorney can help you lower your payments if you want to keep your vehicle. In many cases, you can reduce your payment by filing a Chapter 7 petition. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
File when the time is right. When filing for personal bankruptcy, it is very important that you act at the correct time. There are situations in which it is in your best interest to file immediately, but other times it is advisable to wait. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
You should never feel shame for needing to file for bankruptcy. The bankruptcy process makes people feel guilty and ashamed. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.
Bankruptcy will erase debts. Don’t create any new debts before filing for it. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.
Before you decide to file bankruptcy, you should think of ways to become more financially responsible. Avoid running up current debts or taking on new debt just before filing for bankruptcy. When creditors and the judge are deciding on your case, they will consider your current credit history as well as your past credit mistakes. Having recent good financial behavior, regardless of how short of a time period, is better than no good behavior at all.
Prior to going through with a bankruptcy filing, be sure to list out every one of your expenditures and debts. This will be your basis in filing for bankruptcy, so see to it that you write down all of the debts you’re aware of. Always go through your statements and get exact numbers. Take care not to miss any debts that you need to disclose, or you will be responsible for paying them back after you have filed for bankruptcy.
If you acquire a new job prior to filing for bankruptcy, keep moving forward with your filing plans. Filing for personal bankruptcy may still be the best idea even in their current circumstances. The timing of filing is a huge factor. If you file before the new employment commences, your repayment options will be considered without this new wage figure being taken into consideration.
Rethink a divorce when in a tough spot with finances. There are plenty of stories of people who got divorced, and then filed for bankruptcy right away because they now had less income and a ton of debt from their marriage. A great way to avoid this is by not getting divorced.
Remember that bankruptcy isn’t the end of the world. Just look at Donald Trump. He has filed multiple times! Get on track and stay there to show lenders your positive new efforts. All you need to do really is start saving your money and rebuild your credit so that you have a chance to get that next loan.
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