Facing bankruptcy makes life difficult. When you notice you are in money troubles, you also notice that you might not have many financial options. However, even if you have a poor credit score, you can still live your life and get some of the things you are looking for, like a car or a home.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Alternatives do exist, including consumer credit counseling. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should make every effort to leave your retirement accounts untouched until your retire. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Don’t assume that he will remember something you told him weeks ago. It’s your financial future that is in his hands; don’t hesitate to speak up.
Unsecured Credit
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. Look into getting a secured credit card in order to get back on your feet with building credit. This will allow you to start building a good credit history while minimizing the bank’s risk. After a while, you may be able to get unsecured credit again.
Keep with what you have decided to do. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. You may be able to recover repossessed property if the repossession occurred fewer than 90 days ago. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
Protect your house. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. You are still going to want to check into homestead exemption either way just in case.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Take the time to find out about each one online, and look at the advantages and disadvantages of each. Before making any decisions, discuss the information you have learned with your lawyer.
Investigate your other alternatives before you decide you have to go with bankruptcy. Consider whether debt consolidation may be a more viable alternative. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
Bankruptcy can be a good time to spend time with people you love. Bankruptcy can take a toll on you. Having to declare bankruptcy leaves many people feeling like a failure. Lots of people decide they should hide from everyone else until it is all over. This is not recommended because you will only feel bad and this may cause you to feel depressed. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Chapter 7
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. When filing Chapter 7, you are not legally responsible for the debts in your name. However, if you had a co-debtor, they will be required to pay the debt.
Be certain to have a good understanding of bankruptcy regulations prior to filing a petition. For instance, a filer cannot transfer assets to someone else for at least a year before filing. It is also against the law to max out your credit cards before filing for bankruptcy.
With time, things will get better credit-wise for you, despite your having previously filed for bankruptcy. By becoming more of a financially responsible individual, creditors will get the picture that you’re trying to dig yourself out of a hole. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.
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