Dealing with bankruptcy is a very hard situation. The number of options available to those with financial problems can be small. Although, this situation should not get you down because there are items you can still get like a home loan or car, continue on and learn how.
Do not use a credit card to pay income taxes and then file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You should make every effort to leave your retirement accounts untouched until your retire. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. You must avoid the temptation to conceal any valuables, money or other assets from the courts. If they find that you have lied, you may be faced with fines, penalties or the inability to file in the future.
Credit Cards
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If this happens to you, think about applying for a couple of secured credit cards. This will allow you to start building a good credit history while minimizing the bank’s risk. After a time, you are going to be able to have unsecured credit cards too.
You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask 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. Decide which lawyer you like best buy reviewing all of the lawyers’ answers to your questions. Choose the lawyer who addressed your issues the best. It’s isn’t necessary to make a choice right away. Be sure to talk with a number of lawyers, and compare the information you receive.
If you are considering filing for bankruptcy you definitely need to hire an attorney. Filing for bankruptcy is complicated and there is no way you can understand all you need to know. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Safeguard your home. Filing for bankruptcy does not guarantee that you will lose your house. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. This does not dissolve any co-signers of the debt, and your creditors will continue to try and collect from them.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Wallowing in these emotions benefits no one, and only serve to harm your own mental health. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
File for bankruptcy before your finances get completely out of control. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. As soon as you stop denying that your debt is unmanageable, seek the advice of a good bankruptcy attorney.
You now must realize that filing bankruptcy with not limit your life forever. If you don’t spend frivolously and repay lenders faithfully, lenders will be more willing to lend to you in the future. So implement a savings program, and watch how much it helps you when you need to apply for a home or car loan.
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