Are your finances a mess? Do you believe that filing for bankruptcy is your only choice? Know you are not the only one. Many people have discovered that bankruptcy can help them escape their financial troubles. This article contains advice on bankruptcy that can help you go through the process as smoothly as possible.
Do not use a credit card to pay income taxes and then file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Should the tax be dischargeable, the debt is often dischargeable as well. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Do not tap retirement accounts unless there is no other alternative. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
If bankruptcy is an option for you, secure the services of an attorney. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Safeguard your home. You don’t have to lose your home just because you are filing for bankruptcy. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy, if you chose to file. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Before proceeding with your bankruptcy, it’s a good idea to start spending ample time with the people you care about most. Filing for bankruptcy is a difficult process. At the end of the process, many people are left with feelings of shame and worthlessness. Some people do not even want to speak with others until the bankruptcy is official. Self-imposed isolation can make you feel worse about it and can cause depression. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
Make sure you are completely aware of bankruptcy laws before you consider filing. For instance, for 365 days before filing, no one is able to receive assets from the filer. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. If a creditor notices that activity they can constitute it as fraud and sue to have you pay it all back even after your bankruptcy is complete.
One thing to consider is that filing bankruptcy might be a better alternative to making late payments or missing payments completely. Bankruptcies can remain on your credit reports for 10 years, you can jump right into repairing your credit. One of the good things about bankruptcy is that you can start fresh.
Credit Score
Although it is tempting to toss out the idea of ever owning credit cards again, think again. Since using credit responsibly is the only way to improve your credit score, this is not such a good idea. In the future, you will almost certainly need credit to make major purchases, such as a house or a car, and your credit score will be dreadful if you haven’t used credit since your bankruptcy. 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.
As mentioned, you are not alone in needing to file for bankruptcy. However, you are in a better position to do so than they are, because you’ve read this article. Apply the preceding advice in order to facilitate a seamless bankruptcy case.
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