Although unhappy circumstances in your life might have led you to file for bankruptcy, your life post-bankruptcy can be much better. The bankruptcy laws allow you to have a second chance at building your credit and meeting all your financial responsibilities. Read on for how to make the bankruptcy process be a rebirth instead of financial Armageddon.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
Don’t use a credit card to pay off your taxes before filing 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. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
It should go without saying, but refrain from lying in your bankruptcy filings. 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.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. If you file for bankruptcy at the right time it could enable you to get your property back that you lost to repossession. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Talk to your lawyer to find out how to go about properly filing a petition.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Determine if bankruptcy is necessary. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy is a stressful process. It will certainly affect the credit rating that you have in the future. Therefore, you need to be sure that you really have no other option than to file for bankruptcy.
Don’t forget to enjoy your life once your finances get fixed. It’s not uncommon to be overwhelmed by the filing process. That stress can lead to depression, if you don’t take the right steps in fighting it. Life will get better; you just need to make it through the bankruptcy process.
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. When you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. But, creditors will ask for the money from your co-debtor.
Debt Collectors
If you are filing for bankruptcy, it is imperative that you have a good understanding of your rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are speaking to debt collectors about another type of debt and they tell you it cannot be discharged, check your local regulations. You can report the collectors to your state attorney general if they are lying about this.
Make sure you are completely aware of bankruptcy laws before you consider filing. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Maxing out your credit cards immediately before filing is also illegal.
Don’t drag your feet figuring out if bankruptcy is the right thing to do. Yes, it is hard to admit that you need help; however, the longer you wait the deeper in debt you get. If you are not sure, gather all of your information and spend a little time speaking with a bankruptcy attorney; their experience can help you make the right decision.
Credit Cards
It is not uncommon for people to declare that they will never again use credit cards after they declare bankruptcy. This is not wise, since credit cards can help to rebuild credit. If you don’t use credit at all, you will be unable to re-establish good credit necessary for cars, homes and other future purchases. Start by using just one credit card, and propel your credit in a positive direction.
In conclusion, most circumstance that lead to bankruptcy are not positive. Use what you have learned and take responsibility for your financial health – turn your life around. The truth is, that by using the tips in this piece, it is possible to make bankruptcy a positive experience that gives you the fresh start you need.
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