Bankruptcy is a two-sided coin: relief/stress. You will have to thoroughly review your finances and allow strangers to scrutinize them even harder; this is naturally stressful. Then again, after your debts have been discharged, you can begin rebuilding finances and stopping those calls from bill collectors. The article below discusses some tips to make bankruptcy less painful.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
If you aren’t totally honest about your assets when filing a bankruptcy petition, you could get into serious trouble. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Telling the truth will allow you reach a solution that is feasible, given your current situation.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. You will be removed from any contracts you have with your creditors. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. Take the time to learn more about these different options so you can make the best decision possible.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Interviewing multiple attorneys is a good way to find the best fit.
Consider filing using chapter 13 bankruptcy. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
If you can afford to pay your bills, bankruptcy is not a wise option. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. There are extra hoops to jump through. You will need to go through various hoops in order to be approved for any new loan type. You will need to make a budget and prove that you will be able to afford your new loan payments. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
Make sure that you act at the appropriate time. When it comes to filing for personal bankruptcy, timing is everything. Sometimes it is the best option to file quickly, whereas in other situations filing should be put off until the worst has already passed. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
There are both benefits and harms involved, if you file for bankruptcy. Just know that what you learn today is going to help you out a lot in learning about bankruptcy. The advice found below can assist you in dealing with bankruptcy. Use these tips and you’ll see how they make you feel better about dealing with the processs.
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