Bankruptcy may be hard for people to file for, but it may be necessary, sometimes. Before filing for bankruptcy, it is important that you fully understand what it means and what is involved in the bankruptcy process. The information in this article contains information and advice from people who have actually gone through the process.
Credit Card
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Generally speaking if you can discharge the tax, you can discharge the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. With very few exceptions, the connections between you and your creditors will be severed. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. 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.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Look for a lawyer who you can relate to.
Your most important concern is to protect your home. Filing bankruptcy does not necessarily mean that you will lose your house. Depending on certain conditions, you may very well end up being able to keep your home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
It is imperative that you know for sure that bankruptcy is the option you need. Sometimes consolidating your existing debts can make them more manageable. Filing a claim can take a long time and cause much stress. Your credit will be impacted for many years. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Once the initial filing period is over, ensure that you are getting out and enjoying life. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. It is essential to cope with this stress well, to prevent becoming depressed. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
Rest assured, when you file for Chapter 13 bankruptcy, you still have the ability to take out mortgage and car loans. It is a little more difficult, though. Before you can take out a new loan, you will have to clear it with your trustee. Draw up a budget, demonstrating that you can afford the new loan payment. You will also need to have a good reason why you need the item.
It is important to not wait for the final minute to petition for bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
When filing for bankruptcy, list all of your financial information. Forgetting anything can cause a delay, or even a dismissal. It does not matter what you think of your financial situation, put the sum amount either way. Anything, like a job on the side, assets, like cars, and any outstanding loans should be included.
Do not pay off debts blindly before you file a personal bankruptcy. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Do your research rather than making financial decisions blindly.
Nobody wants to file for bankruptcy, but in some cases the situation becomes necessary. After reading these tips, you can go through the process with some helpful tips. If you take time out to learn from the experiences of others, your journey with bankruptcy won’t be so stressful.
This is a limited-time offer. We are not able to guarantee availability if you wait!
