Having to file for personal bankruptcy is never a positive experience. A lot of people feel ashamed and embarrassed about filing for bankruptcy and do not want to deal with their situation. So don’t give in to bankruptcy, use this article as your guide to figure out how.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Generally speaking if you can discharge the tax, you can discharge the debt. It is pointless to use credit cards if they can be discharged.
When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. Retirement funds should be avoided at all costs. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. The Bankruptcy Code provides a listing of the various asset types that are not included in the bankruptcy process. It is important to be aware of this list so you will know what assets are saved. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. To find out about these changes, you can look at your state’s legislation website or contact their office.
Chapter 7
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. If Chapter 7 is what you file, your debts will get eliminated entirely. With very few exceptions, the connections between you and your creditors will be severed. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You must know about the different bankruptcy types, and how each can affect you.
Take steps to ensure your home is protected. Filing for bankruptcy does not mean you have to lose your home. It may be possible to keep your home if the value has depreciated, or there is a second mortgage. 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.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Remember that missing a payment to the plan will result in your case being dismissed.
You do not always need to give in and file bankruptcy. The advice in this article will be valuable as you work to find another financial path. Make the best use of this information to get your life back on track and prevent further damage to your credit.
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