Embarking on a personal bankruptcy filing can be quite complicated. There are different chapters of bankruptcy, and you may qualify for one or more. Prior to filing your petition, you really need to gain an understanding of how personal bankruptcies work. Here are a few wise tips to help you in your decision.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. The laws governing bankruptcy vary from state to state. 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. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Remember that if you can discharge the tax you can discharge the debt. 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.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Credit Card
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If that is the case, you should try applying for one, or two secured cards. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Only choose a lawyer if you feel like your questions were answered. You can think about your decision before making a commitment. Be sure to talk with a number of lawyers, and compare the information you receive.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Be sure you go on the Internet and do your research to see what’s best for you. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
Don’t file for bankruptcy unless it’s absolutely necessary. You may be able to manager gets more easily by consolidating them. Bankruptcy is not a simple, breezy course of action that should be taken lightly. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.
Chapter 13
Consider Chapter 13 bankruptcy. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Look into all of your options before you choose to file for bankruptcy. There are many recouses available to help you lower your payments and get back on track. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
If you are going to file for bankruptcy make sure you are prompt. For some people, they tend to ignore their poor financial situation and just wishing it away, but that is only putting you in more danger. It is very common for personal debts to snowball suddenly. When this happens, terrible consequences, such as wage garnishment and foreclosure result. When you find that you cannot take care of your debts anymore speak with an attorney for bankruptcy to talk things over.
A lot of individuals who have found themselves filing for bankruptcy think that they will never borrow money or use a credit card again. This is not a good decision on their part because credit cards help in building good credit. Good credit is needed to make major purchases, such as those for homes and automobiles. However, if you don’t use credit, you will be unable to establish a good credit history, which is necessary in order to make those purchases. You just have to realize that proper planning is going to have to take place and that you are going to have to start back up one step at a time.
You will now be aware that a good deal of thought should be applied before bankruptcy papers are filed. If it’s the best course of action for your current financial situation, then be sure to find an attorney with a lot of experience with personal bankruptcy so that you may be able to have a better financial future.
This is a limited-time offer. We are not able to guarantee availability if you wait!
