Just thinking about bankruptcy can make people fearful. A lot of debt and not being able to support your family can be real frightening. If this applies to you, or if you are worried about it happening, this article can help.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Hire a lawyer if you plan on filing for bankruptcy. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Loved Ones
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Bankruptcy can take a toll on you. It is long, full of stress and leaves individuals having feelings of shame and guilt. It is not uncommon for a person to feel the need to pull away from loved ones during the process. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Don’t automatically assume that bankruptcy is your only option. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. This is a lot harder. You will need to secure the trustee’s approval for any new debt obligation. Create a budget and prove that you will be able to afford it. An explanation of need will also be necessary.
Make sure you are acting at the appropriate time. Timing is very important when it comes to personal bankruptcy filings. In some cases, you should file for bankruptcy right away, but in others, there may be reasons why filing quickly would be a bad idea. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
Credit Counseling
Consider your options before deciding to file personal bankruptcy. One of these choices is consumer credit counseling. There are even non-profit companies that may be able to help you. Their job is to lower your payments and interest through negotiations with your creditors. The payments you make go to the credit counseling company, and they send that money to your creditors.
As you are heading towards a bankruptcy filing, don’t be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. This will be viewed as fraud, and you may be held responsible for the balances despite your bankruptcy filing.
Be mindful of paying off outstanding obligations before you file a bankruptcy petition. You might be legally unable to file for bankruptcy if you were still paying your creditors ninety days ago, or your family members a year ago. Learn the rules regarding bankruptcy before making any final financial decisions.
When thinking about filing for bankruptcy, it is best not to waste precious time. It’s hard to admit you need assistance, but the longer you decide to wait, the worse the debt can get. If you talk to a financial professional, they can assess your situation and give you suggestions on what could solve the problem.
Rethink a divorce when in a tough spot with finances. A lot of individuals get a divorce and file for bankruptcy immediately because they did not plan for the troubles that they will be experiencing financially. Reconsidering divorce is usually the best option in any case.
Anyone who is wary of filing for bankruptcy has probably heard how frightening the process can be. The thought of filing may have scared you away in the past, but with this article in hand, you should fear no longer. Make the most of these tips quickly. This will allow you to get back to a normal life with your loved ones.
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