Bankruptcy can be stressful and it can also bring relief. The stress is having to deal with your financial crisis and those involved in the process. However, when your bankruptcy is over, you can re-establish your finances and no longer need to tolerate bill collectors. These tips can make bankruptcy much easier.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Before filing for personal bankruptcy, make sure you are doing the right thing. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. This will ensure that you do not have any surprises once you have filed bankruptcy.
Investigate any new laws before deciding to file a bankruptcy. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 involves the elimination of all of your debt. With very few exceptions, the connections between you and your creditors will be severed. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. Take the time to learn more about these different options so you can make the best decision possible.
Do what you can to keep your home. Filing for bankruptcy will not always result in losing your home. There are mitigating factors, such as lose of value, or multiple mortgages. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Be sure that bankruptcy really is your best option. Consolidation could be the avenue you need to get your finances back in order. Going through a bankruptcy is a long and stressful process. It will also limit your ability to get credit for the next few years. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Act at the right time. When it comes to filing for personal bankruptcy, timing is everything. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Find out when the correct time is for you to file for bankruptcy from a bankruptcy legal professional.
Don’t wait till it’s too late to file for bankruptcy. Many people simply try to ignore their financial troubles, hoping that they will somehow go away, but this is a huge mistake. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
There are benefits and detriments to filing bankruptcy. No matter why you have decided to file, remember that knowledge is power when it comes to managing the situation. The tips contained in this article will make filing for bankruptcy easier to handle. Utilize this advice, and you’ll discover that you’ll be feeling a lot better.
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