Even people who have had assets, such as a car, seized for back tax debt can file for bankruptcy. Depending on personal circumstances, personal bankruptcy can be the only sensible option, despite the hit it levies on credit availability. Review this article for information on filing for bankruptcy and what effects it can have on your life.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. It is possible to take advantage of other options, like consumer credit counseling. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Retirement Accounts
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Retirement accounts should never be touched if it can be helped. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Don’t fear reminding your attorney of any specific details of your case. You cannot expect your lawyer to remember every important detail without some reminder from you. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Secured Card
After a bankruptcy, you may still see problems getting any kind of unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This at least shows you are making an honest attempt at reestablishing your credit worthiness. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
Chapter 13
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 bankruptcy completely wipes out your debt. Your responsibilities to your creditors will be satisfied. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Bankruptcy proceedings can be extremely harsh. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. Most people adopt a very negative attitude toward bankruptcy. This is not a good idea because staying alone could cause serious problems with depression. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.
After your initial filing, take time to enjoy yourself a bit and get your mind off of it. It is common for people to stress when filing. This kind of stress can take a heavy toll on your personal life, especially if you are not making any efforts to adopt a positive attitude. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Lower payments can sometimes be structured into a Chapter 7 solution. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
It goes without saying that, bankruptcy is always available as an option. However, it should not be anyone’s first choice because it does not reflect well on credit. Reading up on the right ways to handle your situation will save you a lot of headaches in the long run.
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