A lot of folks in modern times are deep in debt. It seems that they can never pay their bills down, and they’re constantly pursued by collection agencies and creditors. If this is happening to you, personal bankruptcy may be an option. To find out if filing for personal bankruptcy is the right thing for you to do, read on.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement funds should be avoided at all costs. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Chapter 13 Bankruptcy
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. All debt will be eliminated with Chapter 7. Your former ties with creditors will cease to exist. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Protect your house. Filing for bankruptcy does not always mean you will end up 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. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Be sure you go on the Internet and do your research to see what’s best for you. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.
If you can afford to pay your bills, bankruptcy is not a wise option. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. There are extra hoops to jump through. You must meet with a trustee to gain approval for a new loan. Create a budget and prove you can afford a new loan payment. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Credit Counseling
Consider your options before deciding to file personal bankruptcy. Credit counseling may work for you. You can get the help you need from a variety of non-profit credit counseling companies. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. You pay the organization, and they pay creditors for you.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. Doing so, is a type of fraud that may result in your having to pay back all money advanced from credit card accounts in the months just prior to your bankruptcy.
Don’t spend too much time deciding whether or not you should file for bankruptcy. Although it may be very difficult to admit that bankruptcy is the answer for you, it will be much harder to continue spiraling into a debt quagmire. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
You should now understand that there is more than one path to take when it comes to bankruptcy. Bankruptcy can help you start over with and give you tools to become a more responsible consumer.
This is a limited-time offer. We are not able to guarantee availability if you wait!
