The economy is bad looking these days. Even with a depressed economy, jobs are lost despite debts needing to be paid. High debt often leads to the miserable state of bankruptcy. If you are dealing with the possibility of filing for bankruptcy, then continue on to the article below for some helpful tips.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Before undertaking the bankruptcy process, ensure you have made the correct decision. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. To know what these changes are, go to your state’s website or contact the legislative offices.
Chapter 13
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. All debt will be eliminated with Chapter 7. This includes creditors and your relationship with them will become no longer existent. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You must know about the different bankruptcy types, and how each can affect you.
Do what you can to keep your home. Filing for bankruptcy does not always mean you will end up losing your home. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Research Chapter 13 bankruptcy, and see if it might be right for you. With a consistent income source and less than $250k in debt, try filing for Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Once you have completed the bankruptcy filing, you should take time to do something you enjoy. Many people who undergo this process become way too stressed out. It is essential to cope with this stress well, to prevent becoming depressed. Once the process is complete your life will improve.
If your vehicle is in question, perhaps your attorney can assist in lowering your payments. Filing under Chapter 7 is usually a good way to lower your payments. In order for this to succeed, you must have bought your car in excess of 910 days before filing, have a higher interest loan for it as well as a consistent work history.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. This is harder. Your trustee can help you acquire a new loan. You need to show them why and how you can handle paying back the new loan. An explanation of need will also be necessary.
Do not think of filing for personal bankruptcy as a shameful thing. Bankruptcy can sometimes leave people feeling guilty, ashamed and alone. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Don’t wait until it is too late to file for bankruptcy. What a lot of people do is ignore the fact that they are in a financial crisis and think that their debt is not going to catch up to them. Personal debts can spiral out of control very quickly, and if you don’t take care of them, you may find yourself facing foreclosure or wage garnishment. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
While the economy may be improving somewhat, lots of people remain unemployed and in financial turmoil. Even if you do not have a lot of money, there are many ways to prevent filing for bankruptcy. Bankruptcy can be a difficult journey; however, the process can be made easier by learning the aforementioned information. No matter how bad things seem, there is hope for you, good luck.
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