Carrying too much debt is a problem a lot of people are dealing with now. If you are in this situation and do not take take action, things will only get worse as collection agencies try getting their money. If this sounds a lot like your personal situation, you may have started thinking about filing for bankruptcy. Read this article to determine if this is the right approach for you.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. 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. Being honest is both the right thing to do and, moreover, it is required by law.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. Take your time choosing the right attorney to assist in your bankruptcy. You could even go to different lawyers for advice.
If you are considering filing for bankruptcy you definitely need to hire an attorney. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 eliminates all debts. Your former ties with creditors will cease to exist. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. You must know about the different bankruptcy types, and how each can affect you.
Don’t file for bankruptcy if it is not completely necessary. You might be better off consolidating your debt or availing yourself of some other remedy. The whole process of filing for bankruptcy can be a long, and hard one. The future of your credit will be greatly affected. You have to make certain that you absolutely have no other choice.
Interest Rates
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
After you have filed for bankruptcy, enjoy your life. After filing, many people find themselves stressing over their situation and how to fix it. Stress easily leads to depression, if you are not maintaining control of your emotions. Things will be sunnier after you take positive steps to move forward.
Chapter 7
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, which spell financial disaster for them.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. However, it can be more difficult. You will need to secure the trustee’s approval for any new debt obligation. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. Also, be sure you can provide an explanation as to why this purchase is necessary.
Hopefully, you now understand that there are many options open to you when you are giving a personal bankruptcy filing serious thought. With an open mind, you will be able to soon get the help you need to help your financial situation.
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