Easing Your Financial Woes With Personal Bankruptcy

You might fear the IRS because they could seize assets, such as your car. End calls from debt collectors and gain control over your finances by filing for bankruptcy. Keep reading to gain useful insight about navigating the process.

Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Bear this in mind; if the tax can be discharged, then the debt can be as well. This makes using a credit care irrelevant, since bankruptcy will discharge it.

Be certain you are making the right choice before you file for bankruptcy. It is possible to take advantage of other options, like consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.

Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.

Credit Card

Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. A great way to rebuild your credit is to apply for a prepaid credit card. This at least shows you are making an honest attempt at reestablishing your credit worthiness. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.

Don’t give up. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Consult with a lawyer that can walk you through the filing process.

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. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. You need not decide right away. This offers you the opportunity to speak with other attorneys.

If you’re going to file bankruptcy, you need an attorney. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.

Think carefully about your different options before filing for bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.

Chapter 7

Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. The ties with the creditor will be broken. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. Both options have advantages and drawbacks, so do your research before deciding.

If you can afford to pay your bills, bankruptcy is not a wise option. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.

Although bankruptcy is an available option, it is best you look for alternative solutions first. Avoid debt consolidation services and credit counseling services that seem too good to be true. Remember the tips in this article so you can make the best financial choices and avoid future debt.