There is no doubt that the current economy is a challenging one. The bad economy has contributed to more job losses and mounting personal debt. Deep debts usually wind up in bankruptcy. This is not a pleasant situation. If you would like to know how to get yourself or your friend out of filing for bankruptcy, read on for some possible answers.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. If the tax has the ability to be eliminated, the debt can be too. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Credit Card
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. By doing this, you will be letting people know that you want to fix your credit score. After some time passes they may be willing to offer you unsecured credit.
You should never pay for your first consultation with a bankruptcy attorney. Make the most of this free consultation by asking lots of questions. It is a good idea to consult several attorney before deciding on one. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. It’s isn’t necessary to make a choice right away. You have lots of time for consulting with other lawyers.
Be aware of recent changes, if any, in the bankruptcy code. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. To learn about these changes, try contacting your state’s legislation office or checking their website.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Should you choose Chapter 7, your total debt load will be erased. All the things that tie you to creditors will go away. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Personal Bankruptcy
If you are considering filing for personal bankruptcy, be certain that this is really the right course of action for you. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. There is not easy process associated with personal bankruptcy. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. However, it will be a longer and more arduous task. You have to meet with your trustee to get approval for the new loan. Create a budget and prove you can afford a new loan payment. Also, you need to be ready to say why you’re going to need the item.
Get the word “shame” out of your head when filing for bankruptcy. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. These feelings can cause you to make rash decisions and cause psychological problems. Keep a positive state of mind to deal with your tough financial situation.
Bankruptcy is a challenging time and can create a huge amount of mental and emotional stress. By hiring a competent attorney, you can alleviate some of that stress. Don’t make your choice to retain a particular lawyer simply because they are the cheapest. The cheapest attorney may not be the best, but the most expensive may not be the best either. Ask your friends, relations and acquaintances who have shared your experience to give you referrals to good lawyers. You might want to visit a court hearing and observe lawyers handling their cases.
Financial Information
Every single piece of financial information you have needs to be studied and properly listed when filing a bankruptcy claim. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Even if you believe that certain financial information is inconsequential, do not avoid including it in your documentation. This type of income could come from doing odd jobs, extra cars or outstanding loans.
Even though the economy is slightly getting better, so many people do not have jobs or are not getting paid enough. Even if you do not have a lot of money, there are many ways to prevent filing for bankruptcy. Hopefully, the information in this article has provided you with useful information that can help you stay out of bankruptcy. Godspeed.
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