Debt is something a lot of people have to deal with on a daily basis. Debt continues to mount while collection phone calls continue to rise. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. The article below will help you figure out if bankruptcy is right for you.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Each state has its own laws regarding personal bankruptcy. Your home and other major assets may be protected in your state, while they are vulnerable in other states. Familiarize yourself with the bankruptcy laws of your state prior to filing.
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 many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Never lie about anything in your bankruptcy petition. 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.
After filing for bankruptcy, you could have trouble acquiring unsecured credit. If you find that to be the situation, consider requesting secured cards. 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.
Personal Bankruptcy
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. For example, consumer credit counseling programs can help if your debt isn’t too large. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Before filing bankruptcy consider every available avenue. Many times a consolidation loan will ease your financial struggles. Filling for bankruptcy is a lengthy, stressful process. The future of your credit will be greatly affected. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
If your income exceeds your obligations, you should not seek bankruptcy protection. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Interest Rate
You should weigh every option before thinking about bankruptcy. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Most creditors will be willing to work out an option to avoid not getting paid at all.
Once your initial filing is complete, it is time to take some time to relax a little. After filing, many people find themselves stressing over their situation and how to fix it. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. You are getting a fresh start, and things will get better.
Chapter 7 Bankruptcy
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. Debts that involved a co-signer can be discharged in Chapter 7 bankruptcy. Any co-debtor may well be held responsible for paying off the total remaining amount of the debt, though.
After reading this article, you now know that there are many options available and possibilities to consider when filing for bankruptcy. Bankruptcy can help you start over with and give you tools to become a more responsible consumer.
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