Bankruptcy is very common in today’s economic climate. Not only the economy, mind you, but people’s spending habits are also to blame for the increase in claims filed. Before you choose to file for bankruptcy, it is important that you know the ins and outs of the subject, in order to ensure you make the best decisions. Read further for some helpful advice regarding bankruptcy.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. If the tax can be discharged, so can the debt. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Keep working to improve your situation. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Talk to your lawyer to find out how to go about properly filing a petition.
It is a good idea for you to hire a bankruptcy to handle your bankruptcy process. The topic of bankruptcy is a complicated one and it is important that you know all about it. A bankruptcy attorney can advise you on how proceed properly.
Determine if bankruptcy is necessary. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy is a stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Before you decide to file for bankruptcy you want to be absolutely certain that it is the only way to resolve your problems.
Chapter 13
Consider Chapter 13 bankruptcy, if you chose to file. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Remember to spend some quality time with your loved ones. The process of bankruptcy can prove particularly brutal. It is extremely stressful and long, and it can leave you feeling ashamed of yourself. Some people do not even want to speak with others until the bankruptcy is official. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. So, use what you learned today so that you know what decisions to make while you contemplate filing for bankruptcy.
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