If the IRS or your other creditors are on to you about the money you owe, you should consider filing for bankruptcy. Of course your credit will be hurt when you file for bankruptcy, but sometimes this is your best choice. Continue reading this article to understand what you need to know about bankruptcy and the likely end result of going through one.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this describes your situation, it makes sense to become familiar with relevant laws. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. Some states may protect you home, and some may not. Be aware of bankruptcy laws before filing your claim.
Credit Card
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. This means using a credit card is not necessary, when it will just be discharged.
Exhaust every other option before making the decision to file for personal bankruptcy. Look into other options, such as consumer credit counseling. 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.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. It is wrong to assume that your lawyer will remember every word you ever utter! Speak up. This is your life, and your future depends on it.
Don’t give up. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Talk to a lawyer for help with the petition filing process.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Most attorneys offer free consultations, so meet with a number of them before you retain one. Make your decision after all of your questions have been answered. You do not need to make a decision immediately after the consult. You have lots of time for consulting with other lawyers.
Safeguard your home. Filing for bankruptcy does not mean you have to lose 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. You are still going to want to check into homestead exemption either way just in case.
Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. In many cases, you can reduce your payment by filing a Chapter 7 petition. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
Be sure you know the bankruptcy laws before you think about filing. For instance, for 365 days before filing, no one is able to receive assets from the filer. In addition, it is unlawful for the filer to increase the amount of debt they are carrying on their credit cards right before they file.
As stated previously in this guide, personal bankruptcy can always be an option. It is not something that should be done lightly, however, due to the negative effects it can have on one’s credit. Staying informed on how to manage this situation could prevent you from experiencing headaches and it can also help you keep your valuables.
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