As you probably know, the economy is in the toilet. When the economy tanks, many people lose jobs and accumulate debt. Rising personal debt leads, in many cases, to increased bankruptcy filings. If you’re in danger of going through bankruptcy, then the below article can help you in getting out of it.
Be certain to gain a thorough understanding of personal bankruptcy by using online resources. You can learn a lot on the U.S. Run a quick Internet search to find out all the different agencies you should be contacting or visiting via the web to find out what you can. As with everything in life, the more you know about filing a claim, the better off you’ll be. You can properly prepare when you know what you’re preparing for.
Credit Card
Do not use a credit card to pay income taxes and then file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Should the tax be dischargeable, the debt is often dischargeable as well. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
Don’t fear reminding your attorney of any specific details of your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. Companies are constantly popping up, claiming to help, yet only seek to profit from your misery. In ensuring that your bankruptcy is as simple as possible, trusting your attorney makes a big difference.
Do some research about laws and legislation before filing. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Check into less drastic solutions prior to declaring bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Chapter 13
Consider filing using chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. However, if you were to miss a payment, the court would dismiss your case right away.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. You can relieve yourself of any liability for debts that you may share with someone else through a Chapter 7 filing. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. There are extra hoops to jump through. Your trustee must approve any new loans. You will need to make a budget and prove that you will be able to afford your new loan payments. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Do not rely on your debtors information about whether or not certain loans can be included in your bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
Take action when the time is right. Timing is critical, particularly when it comes to filing for bankruptcy. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
Even the economy is gradually getting better, many people still do not have a job. Even long-term job loss does not inevitably have to result in bankruptcy. Hopefully, this article has given you information that you can use to avoid having to file for bankruptcy. Put this advice to work for you starting today.
This is a limited-time offer. We are not able to guarantee availability if you wait!
