It is not uncommon these days for people to be drowning in debt. They are harassed by collection calls and creditors all while the bills keep piling up. If you are experiencing overwhelming stress due to your financial situation, you might want to think about filing personal bankruptcy. Continue reading this article so you can figure out if this is something you should do.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Remember that if you can discharge the tax you can discharge the debt. Because of this, transferring the debt to your credit card is pointless.
Always be honest with the information you give about your finances. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If that’s the case, it is beneficial to apply for one or even two secured cards. This will show people that you are serious about getting your credit record back in order. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
If you can, get a word-of-mouth referral for a lawyer. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Unsecured Debt
Consider Chapter 13 bankruptcy, if you chose to file. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. You can secure your home under Chapter 13 and pay your debts with a payment plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. Keep a positive state of mind to deal with your tough financial situation.
Going through bankruptcy is tough and can be mentally and emotionally draining. To combat these problems, look into securing a good lawyer. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. What you need is a thoroughly competent lawyer, and this does not imply that you have to pay through the nose. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
If you are planning to file bankruptcy, avoid taking large cash advances from credit cards thinking that the debt will be erased. That is considered fraudulent behavior, and you can still have to pay the credit card back, bankruptcy or no.
Watch how debts are paid off prior to filing. There are many laws when it comes to bankruptcy, including prohibition of paying some creditors 90 days before you file, as well as family for a whole year. Read up on the rules before you make any decisions about your finances.
It is important not to delay the process of determining whether or not you should file for bankruptcy. It might seem a little scary, but if you wait forever to act, you’ll just be waiting that much longer once you do ultimately file. If you are not sure, gather all of your information and spend a little time speaking with a bankruptcy attorney; their experience can help you make the right decision.
It is not uncommon for those who have endured a bankruptcy to promise to never utilize credit again. This may not be such a great idea because you still need credit to to help build better credit. Without using credit cards or other forms of credit, it is nearly impossible to rebuild your credit worthiness. Start by using just one credit card, and propel your credit in a positive direction.
If you have reached a point where you are forced to file bankruptcy, you can now understand that many resources are available to help you. If you go into the process armed with knowledge and confidence, you can wipe away your debt and give yourself a fresh start.
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