Just thinking about bankruptcy is more than enough to strike substantial fear into anyone’s heart. Growing debt loads combined with continuous family obligations can cause an incredible financial strain. If you’re afraid of this scenario (or worse if you are living at), it is our sincere hope that the advice given here will be of help to you.
Credit Card
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. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Do not tap retirement accounts unless there is no other alternative. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Don’t be reluctant to remind your lawyer about specific details he may not remember. Don’t just assume they already know and that they have these important details committed to memory or written down. This is your future in their hands, so don’t be scared to mention it.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. It is important to know what types of possessions may be taken away before they actually are seized.
It is important to protect your home when filing bankruptcy. You do not have to lose your home in the process of a bankruptcy. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. It may be that all you really need to do is consolidate some of your debts. The bankruptcy process takes forever to finish and is very nerve-wracking. Your future credit will be affected by these actions. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
Chapter 13
Consider Chapter 13 bankruptcy, if you chose to file. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. 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.
Do not let bankruptcy consume you, make sure you make time for your friends and family. The process of bankruptcy can prove particularly brutal. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. A lot of people become depressed and withdrawn until their bankruptcy is discharged. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. Time spent with people who care about you can give you new perspective on your financial situation.
If you are worried about your car being repossessed, consult your attorney about trying to get the monthly payment lowered. Chapter seven bankruptcy often provides for the lowering of payments. But, your car has to have been bought at least 910 days before you file. Also, it must come from a high interest loan and you have to have been consistently working.
Look at bankruptcy as a chance to mature and take responsibility for your personal finances. You may need to get credit counseling or simply learn how to balance your budget. These feelings can cause you to make rash decisions and cause psychological problems. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Other laws you need to know include debt-based regulations. You cannot increase debt via credit cards prior to filing a claim. Your finances basically have to remain frozen.
It is not unusual for people to be worried about bankruptcy; the process is nerve-wracking. The thought of filing may have scared you away in the past, but with this article in hand, you should fear no longer. Take advantage of all the suggestions you’ve read here so that you can get your finances on the right track.
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