Filing for bankruptcy is still an option for anyone who has had possessions repossessed by the IRS. Bankruptcy will hurt your credit, this is true. However, it may be the only viable option available to you. The article below discusses some of the pros and cons of filing bankruptcy.
Most people end up filing for personal bankruptcy because they owe more than they make. If this is happening to you, then learn about the laws where you live. Laws differ from one state to the other. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Be aware of bankruptcy laws before filing your claim.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. You should not use your retirement savings unless the situation calls for it. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Determine which assets won’t be seized before filing for bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Never give up. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If it has been 90 days or less between the repossession of your property and your filing, you might be able to get your property back. Consult with a lawyer who can advise you on what you need to do to file a petition.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. You could find relief from small debts by using a consumer credit counselor. Sometimes you can negotiate a reduced payment, though you must strive to get it all in writing.
Protect your house. Filing for bankruptcy will not always result in losing your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Chapter 13 Bankruptcy
Consider filing a Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
You should weigh every option before thinking about bankruptcy. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
When filing for bankruptcy, ensure you have listed all of your financial obligations. Forgetting anything can cause a delay, or even a dismissal. No sum is too small to be included; err on the side of caution and include everything. This may include secondary employments, vehicles you own and loans you still owe money on.
Consider every option prior to filing for bankruptcy. Consider credit counseling. There are some good non-profit organizations that could help you. These organizations can work with creditors to lower your payments and interest rates. Your payments are made to the organization and they repay the creditors.
Know that bankruptcy in the end may be your best bet for restoring your credit, as opposed to the continuous pattern of missing or making late payments on what you owe. Yes, the bankruptcy will stick around for a whole ten years, but the clean slate you get from filing will help you get back on the right track quickly. Bankruptcy can give you the fresh start you need.
Obtain copies of all credit reports about six months after the bankruptcy petition has been approved. Scrutinize the information, and make sure all debts that should be discharged are and that all of your previous credit accounts are closed. If anything is incorrect, then follow up quickly and start repairing your credit.
When you fill out the papers for filing bankruptcy, be sure to list every debt that you want to have eliminated. Any debts omitted from the paperwork will not be covered in the discharge. It is up to you to ensure your debts are written down so you don’t need to pay bills that might have been discharged.
No matter how bad things are when you are filing for bankruptcy, be honest. Lying concerning your financial situation will not help you out of this situation. This is not legal. You can end up in jail for a while if you don’t properly record your assets and debts.
As was stated before, the option of filing for personal bankruptcy should be kept open. However, it has detrimental effects on your credit, so this should not be your first choice The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.
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