Think carefully before you decide to file for bankruptcy. There are many factors involved in the bankruptcy process and it is crucial that you understand them. Use these tips to get on the right track. Deciding whether or not to file for bankruptcy is a big decision. Proper and thorough research can alleviate some of that pressure.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. A common rule is that dischargeable tax means dischargeable debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Exhaust every other option before making the decision to file for personal bankruptcy. You have better options. For example, you could try credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
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 never touch your retirement accounts, unless you have absolutely no choice. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. If this happens to you, think about applying for a couple of secured credit cards. You can exhibit your desire to rebuild your credit this way. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. The lawyer representing you when you file needs to have full knowledge of your financial situation. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Stay positive. If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. A lawyer will be able to assist you with filing the paperwork to get the items back.
Bankruptcy Laws
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. To learn about the changes, you should check out the website of your state’s legislation or you can call their office.
Take steps to ensure your home is protected. Filing for bankruptcy does not always mean you will end up losing your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. You may also want to check out the homestead exemption because it may allow you to keep your home.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. Before making any decisions, discuss the information you have learned with your lawyer.
Bankruptcy can get a bit tricky at times, but as long as you’re using what you learned here, the process should be a lot easier. You may become overwhelmed with the process. If that begins to happen, always refer back to these tips. Take some time to think about the tips you have read here and how they apply to your situation. Then you will be prepared to make informed decisions about bankruptcy and your financial future.
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