Filing for bankruptcy is not a fun thing to do. It is a difficult and embarrassing process that no one wants to go through. Don’t give into it and be sure to use this advice to figure out what you need to know to avoid bankruptcy.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Bear this in mind; if the tax can be discharged, then the debt can be as well. This means using a credit card is not necessary, when it will just be discharged.
Unsecured Credit
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Ensure that you bankruptcy is your best choice. It might be possible to consolidate some of your debt instead. Bankruptcy is a long process that can be stressful. It will have a major effect on your credit as time goes on. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Consider if Chapter 13 bankruptcy is an option. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. However, if you miss even one payment, the court will dismiss your entire case.
If you are earning enough to cover your bills, don’t file for bankruptcy. 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
Look at all the alternatives to bankruptcy before filing. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. It’s a bit more difficult, though. Your bankruptcy custodian will need to approve the loan. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. An explanation of need will also be necessary.
Chose the proper moment to make your move. Timing can be critical when it comes to personal bankruptcy cases. There are occasions where it pays to delay and others where a quick decision is the best option. A lawyer is in the best position to evaluate your case and figure out when you should file for bankruptcy.
Do not use the word “shame”, if you go bankrupt. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. These are useless emotions, however, and can be harmful to your mental state. Staying positive and upbeat is the proper way to deal with bankruptcy.
Going through bankruptcy is tough and can be mentally and emotionally draining. To help yourself deal with this stressful situation, make sure you hire a legitimate attorney. Get recommendations and look into other qualifications rather than just choosing based on cost alone. Choosing a lawyer should be based on finding one with a proven track record who can give you the help that you need. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. Try to get a referral from a trusted friend or family member.
If you are going to file for bankruptcy make sure you are prompt. Do not avoid your creditors; they will not go away. It is important to decide on a course of action as soon as you begin experiencing financial problems. It doesn’t take long for debt to become unmanageable, and not taking care of it could eventually lead to wage garnishment or foreclosure. 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.
When filing for bankruptcy, list all of your financial information. If you don’t do this, your file could be delayed or dismissed. No sum is too small to be included; err on the side of caution and include everything. Some things to be included are: current loans, valuable vehicles and side jobs.
Gain an understanding of bankruptcy law before you file. There are some clauses within bankruptcy that could cause you upsets. Mistakes can also have your case dismissed. Before you go ahead, devote a little time to research and the topic of personal bankruptcy. This will make things easier in the long run.
As you can tell, you do not have to let bankruptcy take control of you. You can use what you know to find the road to return from the brink of bankruptcy. Apply the tips from this article to make positive changes to your life and financial situation.
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