The economy is still weak today. When there is a bad economy there are a lot of people losing their jobs and having problems with debt. High debt often leads to the miserable state of bankruptcy. If you are dealing with the possibility of filing for bankruptcy, then continue on to the article below for some helpful tips.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Be certain you are making the right choice before you file for bankruptcy. It is possible to take advantage of other options, like consumer credit counseling. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If you do, then try applying for a coupe of secured cards. This at least shows you are making an honest attempt at reestablishing your credit worthiness. In time, it may be possible for you to obtain unsecured cards.
It is important to understand your rights when filing bankruptcy. Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. You may be able to get your property back if fewer than 90 days have passed between the repossession and are filing for bankruptcy. Consult with a lawyer who is able to assist you in the filing of your petition.
Before you file for personal bankruptcy, be sure that you are cognizant of all current laws. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. You will be removed from any contracts you have with your creditors. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. You must know about the different bankruptcy types, and how each can affect you.
Prior to choosing a bankruptcy attorney, seek a free consultation with at least three attorneys. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Looking for an attorney will help you find a lawyer you feel good around.
Protect your home. There are many options available to help protect you from losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
If you are going to be filing for bankruptcy, think about filing Chapter 13. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
After you have filed for bankruptcy, enjoy your life. Many people feel a lot of stress while they work through the bankruptcy process. This stress may lead to something worse like depression, so do what you can to fight that from happening. Life will get better; you just need to make it through the bankruptcy process.
Avoid Bankruptcy
While the economy may be improving somewhat, lots of people remain unemployed and in financial turmoil. Even without steady income, there are things you can do to avoid bankruptcy. You hopefully have more knowledge now on how you can avoid bankruptcy. We wish you well.
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