Coping with the realization that you have to file bankruptcy is not any easy thing to do. As you look at the hole you’ve dug yourself, you might think there is no escape. But remember that there is always a way out of a situation you are in, so do not let bankruptcy scare you.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The United States Department of Justice and American Bankruptcy Institute are two such places to look. The more you know, the better prepared you will be to make the best decisions and ensure that your bankruptcy goes smoothly.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Meet with a few attorneys who offer free consultations before hiring one. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Safeguard your most valuable asset–your home. Bankruptcy filings don’t necessarily have to end in the loss of your home. You can still keep your home, it just depends on your specific situation and the value of your home. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Be around family as much as possible. Bankruptcy proceedings can be extremely harsh. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. It is not uncommon for a person to feel the need to pull away from loved ones during the process. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
Before you file for personal bankruptcy, weigh all of your options. There are many recouses available to help you lower your payments and get back on track. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Talk with your lawyer about getting lower payments for any car you wish to keep. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
Never take huge cash advances directly from your credit cards before you file for bankruptcy, since you know that all debts will be erased from these cards. This is against the law and it is fraud. After the bankruptcy process you can be made to pay it all back to the creditor.
If you plan to pay debts off before you file for bankruptcy, be careful. You may find that bankruptcy law prohibits you from paying back some types of creditors for 90 days before you file, and a year for family members. Know what the laws are prior to making any payments.
Credit Cards
Lots of individuals who previously filed bankruptcy vow to shun the use of credit cards or lines of credit in the future. Using credit helps you build up your credit again. Without using credit cards or other forms of credit, it is nearly impossible to rebuild your credit worthiness. Choose a single card to get started on your credit repair journey.
You should obtain a copy of your credit report from all three reporting agencies soon after you declare bankruptcy. Errors occur, so make sure things appear exactly as they should. Follow up on any discrepancies right away, so that you can begin repairing your credit.
Even if you become employed soon after filing for bankruptcy, you should continue with your plan. Even with some extra cash, bankruptcy could still be your best bet. Your timing can make a tremendous difference when filing for personal bankruptcy. If you file before gaining more income, you have a better chance of having your debt discharged.
Make sure that you are aware of what debts will be able to be eliminated with the bankruptcy. There are a few debts that may remain depending on what they are. These types of debts need to be taken care of through alternate means, such as credit counseling or debt consolidation.
You’re going to need to select an attorney with ample experience dealing in bankruptcies if you’re planning to file. There are numerous attorneys available to assist you with your case. And make sure that you do not always go cheap, hire a quality lawyer, they may be better suited to help you.
Filing for personal bankruptcy does not mean you are limited in you daily life. Through the saving of money and striving to reestablish your credit, creditors will take this to heart. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.
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