Although circumstances leading to bankruptcy may not be positive, life following bankruptcy can be. Bankruptcy exists in order to provide you with a fresh start. Don’t look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Be sure you’re doing what’s right before you file for bankruptcy. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. Leave your retirement accounts untouched unless there is absolutely no other alternative. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Not only is hiding income and assets wrong, it is also a crime.
It is important to remind your lawyer of any details that may be important to your case. Just because you have told him something of importance that he will remember it. Speak up if something is troubling you, as this is your future we are talking about here.
Determine which assets won’t be seized before filing for bankruptcy. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. You can determine exactly which of your possessions are at risk by consulting this list before you file. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
State Legislature
Stay abreast of new laws that may affect your bankruptcy if you decide to file. Bankruptcy laws change a lot and before making the decision to file, you need to know what you are getting yourself into. Review the state legislature web site or contact the state legislature office to keep abreast of changes in the law.
Make certain that you comprehend the differences between Chapters 7 and 13. Chapter 7 involves the elimination of all of your debt. All happenings with creditors will disappear. 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.
Look into filing Chapter 13 bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
If your income exceeds your obligations, you should not seek bankruptcy protection. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Don’t forget to enjoy yourself during your bankruptcy. Many people who undergo this process become way too stressed out. That stress can lead to depression, if you don’t take the right steps in fighting it. Life will get better; you just need to make it through the bankruptcy process.
Be sure you’re acting when the time is right. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
Filing for bankruptcy can cause stress. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Try not to pick a lawyer based on cost alone. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. When deciding on an attorney get referrals, contact your better business bureau or get a free consultation from at least three attorneys. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
Don’t wait until it is too late to file for bankruptcy. Some folks ignore financial difficulties for a long time, and this can be disastrous. It doesn’t take long for debt to become unmanageable, and not taking care of it could eventually lead to wage garnishment or foreclosure. As soon as you discover your debt is getting too big, immediately get hold of a bankruptcy attorney so that you can talk to him or her about your options.
The road to personal bankruptcy is a sad and difficult one. Life after bankruptcy can be normal and happy. If you use these tips, you may be able to use bankruptcy to make your life better going forward.
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