Great Tips To Help You Work Through Personal Bankruptcy

If you have been put into the position of needing to file for bankruptcy, you are likely not to be very happy about it, but it does not lead to your life ending. The whole point is to wipe the slate clean and have a new chance at life. Keep reading to handle the bankruptcy process in a way that is a rebirth and not a financial Armageddon.

Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.

When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.

Never give up. Many times you can get repossess property back once bankruptcy has been filed. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Speak to a lawyer who will be able to help you file the necessary paperwork.

You should never pay for your first consultation with a bankruptcy attorney. Make the most of this free consultation by asking lots of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. This offers you the opportunity to speak with other attorneys.

Chapter 13

Understand the differences between Chapter 7 and Chapter 13 bankruptcy. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. All creditor relationships will be severed. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.

Consider Chapter 13 bankruptcy for your filing. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.

If you can afford to pay your bills, bankruptcy is not a wise option. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.

Debt Repayment

Make sure bankruptcy is truely your only option before filing. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.

See if your attorney can help you lower your payments if you want to keep your vehicle. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. But, your car has to have been bought at least 910 days before you file. Also, it must come from a high interest loan and you have to have been consistently working.

Don’t drag your feet when it comes to filing 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. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. 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.

Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Failing to list these could cause the dismissal or delay of your bankruptcy petition. Add absolutely everything to your list, including small amounts. Some things to be included are: current loans, valuable vehicles and side jobs.

There are a lot of things to consider prior to filing for bankruptcy. Consider credit counseling. There are non-profit organizations that you can use. They can work with the creditors to lower payments and interest. You pay the organization, and they pay creditors for you.

Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. If you were to do this you could be charged criminally with fraud, because the act is intended to rip off the company.

The events that lead someone to declare bankruptcy can cause great emotional distress. Even though that is the case, you should not allow it to depress you in any way. Bankruptcy is not the end. Follow the tips given here in order to make it a new beginning.