Mention of the word, “bankruptcy” is enough to terrify many. Growing debt, along with insufficient income to support a family, can make life seem unbearable. The following advice will greatly help you if bankruptcy is a fear of yours.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If this is your case, you should do some research about bankruptcy laws in your state. Each state has its own set of rules regarding bankruptcy. For instance, in some states you can keep your home and car, while other states prohibit this. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Credit Card
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Because of this, transferring the debt to your credit card is pointless.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should not use your retirement savings unless the situation calls for it. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Not only is hiding income and assets wrong, it is also a crime.
Don’t file for bankruptcy the income that you get is bigger than your bills. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Once your initial filing is complete, it is time to take some time to relax a little. A lot of debtors usually get stressed when they file. Stress easily leads to depression, if you are not maintaining control of your emotions. Once the process is complete your life will improve.
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. When you file a Chapter 7, your debts will be dissolved. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, which spell financial disaster for them.
Understand the rights you have as a bankruptcy filer. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
Make sure that you act at the appropriate time. Timing can be critical when it comes to personal bankruptcy cases. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
File for bankruptcy before your finances get completely out of control. A lot of people ignore their financial problems, thinking they are going to go away; that is a big mistake. Debt can become a big problem rapidly, and if you fail to handle it, you can face foreclosure or garnishment of wages. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
Don’t just assume bankruptcy is the right option, especially if you have not considered others. For example, you may want to think about credit counseling. This does not necessarily have to cost you, as there are some organizations that will assist you for free. They can work with the creditors to lower payments and interest. Once you pay them, they make the payments to your creditors.
Know that bankruptcy can be much better for your finances than missing payments or making late payments on debts. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. One of the benefits of bankruptcy is a relatively fresh start.
Credit History
You will find many people, who have filed for bankruptcy, completely separate themselves from ever using credit again if possible. The fallacy in this thinking is that credit is needed to improve your credit history again. If you don’t ever use credit, your credit history will not improve, and you may not be able to purchase important things like a home and car. The best way to help build your credit is to get one credit card and pay it off at the end of every billing cycle.
It is not unusual for people to be worried about bankruptcy; the process is nerve-wracking. You may have lived in fear of it before, but you no longer have to now, thanks to this article. Use the personal bankruptcy information here as you work your way through your financial situation and make your life situation better for you and your family.
This is a limited-time offer. We are not able to guarantee availability if you wait!
