Unfortunately, bankruptcy today is something that is becoming very common. You can thank the dismal economy for that. In order to get through the process safely and with a minimum of fuss, you are going to want to thoroughly educate yourself on bankruptcy before you try to file for it. The following tips are going to help clarify some bankruptcy confusion for you.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Don’t be afraid to remind your attorney of certain details in your case. Don’t assume that he will remember something you told him weeks ago. Speak up if something is troubling you, as this is your future we are talking about here.
Secured Card
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t hide assets or liabilities when filing for bankruptcy. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Bankruptcy law evolves constantly, and it’s important to stay up-to-date to ensure that you file properly. To know what these changes are, go to your state’s website or contact the legislative offices.
Do what you can to keep your home. Filing bankruptcy does not necessarily mean that you will lose your house. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Loved Ones
Remember to spend some quality time with your loved ones. The process for bankruptcy can be brutal. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. A lot of people become depressed and withdrawn until their bankruptcy is discharged. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. Therefore, it is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Avoid filing for bankruptcy if you make more money than your monthly bills. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. This is a lot harder. You need to speak with your trustee so that you can be approved for a new loan. Create a budget and prove that you will be able to afford it. You will always have to let them know why this item needs to be purchased.
Act at the right time. In bankruptcy filing, timing is quite important. Sometimes it is the best option to file quickly, whereas in other situations filing should be put off until the worst has already passed. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. The bankruptcy process can make many people feel ashamed, guilty and unworthy. These feelings do not help you and provide no value. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Bankruptcy can be overwhelming to most people, and can be quite stressful. To help yourself deal with this stressful situation, make sure you hire a legitimate attorney. Be sure that you consider more than the expense when you choose a lawyer. Hire the best attorney you can afford, not the one who charges the most. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. Attending a court hearing will give you experience as to how lawyers handle these cases.
Understand the rules and laws before submitting your petition for bankruptcy. When it comes to the code of personal bankruptcy, a large number of loopholes exist that could be troublesome. If the regulations are not followed, your case may be subject to a dismissal order. Before you begin bankruptcy proceedings, research as much as you can. That way, you will have an easier road.
It is not uncommon for those who have endured a bankruptcy to promise to never utilize credit again. In reality, though, credit cards can be a useful tool for people who are looking to rebuild their credit score after bankruptcy. If you don’t use your credit, you won’t be able to make big purchases on credit in the future. Start with one single credit card, and rebuild your credit once more.
As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. If you want to know that you are doing the right thing when dealing with your bankruptcy be sure to put the information you read in this article to use.
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