Many negative emotions are related to filing bankruptcy. Unfortunately, people experiencing bankruptcy often find themselves spending a large amount of their time worrying about day-to-day issues and expenses. They think they are stuck, but they really aren’t, and neither are you, thanks to the following tips.
Credit Cards
Do not attempt to pay your taxes with your credit cards and subsequently file 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. Remember that if you can discharge the tax you can discharge the debt. It is pointless to use credit cards if they can be discharged.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Don’t avoid telling your lawyer specific details with your case. You cannot expect your lawyer to remember every important detail without some reminder from you. Speak up, because it is your future on the line.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Initial Consultation
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Make your decision after all of your questions have been answered. After your consultation, take your time to make your decision. So you have sufficient time to speak with a number of lawyers.
If you’re going to file bankruptcy, you need an attorney. You might not understand all of the various aspects to filing for bankruptcy. Your lawyer will make sure that the filings are correct and help you navigate the complex process of filing for bankruptcy.
Chapter 13
Do some research to find out more about Chapter 13 and Chapter 7. Chapter 7 eliminates all debts. Any debts that you owe to creditors will be wiped clean. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Spend time with loved ones. Filing for bankruptcy is a difficult process. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. There are a number of people who wish to go into seclusion while undergoing the process of personal bankruptcy. Self-imposed isolation can make you feel worse about it and can cause depression. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Do not forget to enjoy life a little once you get through the initial filing process. Many people who undergo this process become way too stressed out. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. Once your petition is in the hands of the judge, all you can do is wait.
Be sure you know the bankruptcy laws before you think about filing. For instance, a filer cannot transfer assets to someone else for at least a year before filing. Other laws you need to know include debt-based regulations. You cannot increase debt via credit cards prior to filing a claim. Your finances basically have to remain frozen.
Do not get sizable cash advances from credit cards before filing for bankruptcy because you think the debt from the cards will be erased., Doing so constitutes fraud. You can easily be ordered to repay all of this money, by the courts.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. It is true that a bankruptcy stays on your credit record for ten years, but you are freed to start improving your credit immediately. In other words, bankruptcy can give you an opportunity to start over if handled correctly.
Consolidate a list of what you owe. This will be the basis for your bankruptcy filing, so make sure you include all the debts you are aware of. Be 100% certain that the amounts you are claiming as being owed are true and correct. Remember to take your time here. Rushing through will ensure that some numbers somewhere will be mixed up and then the process will blow up in your face.
Once a few months have passed after your bankruptcy, contact the three major credit reporting agencies and request copies of your report. Check to make sure that your report accurately shows that your debts have been discharged and that closed accounts are also updated. Resolve any problems immediately so you can build up your credit score as quickly as possible.
This article has, hopefully, taught you that bankruptcy does not mean life is over. Going through bankruptcy will be hard at first, but it can also be worth it. If you use these tips and ideas, you will be on your way to a better financial future.
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