Just thinking about bankruptcy can make people fearful. Not being able to provide for their loved ones and debt that continues to mount is an issue for many. If you’re frightened by bankruptcy, or are living with its effects, you’ll find helpful advice in the following paragraphs.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Generally speaking if you can discharge the tax, you can discharge the debt. This means using a credit card is not necessary, when it will just be discharged.
Be sure you’re doing what’s right before you file for bankruptcy. You can find services like counseling for credit that consumers can use. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Retirement Accounts
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Leave your retirement accounts untouched unless there is absolutely no other alternative. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Bankruptcy is tricky and hiring a good lawyer will be a must. You might not understand all of the various aspects to filing for bankruptcy. A personal bankruptcy attorney can help and guide you along through the bankruptcy process.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Prior to choosing a bankruptcy attorney, seek a free consultation with at least three attorneys. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Take some time to talk to different lawyers to find one that fits your needs, and meshes well with you.
Be sure that bankruptcy really is your best option. Maybe you can just consolidate debt to make it simpler to deal with. It is not a quick and easy process to file for bankruptcy. Having a bankruptcy on your record will hinder your ability to get credit in the future. This is why you must make sure bankruptcy is your last resort.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Investigate other alternatives before resorting to bankruptcy. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. If you are facing foreclosure, consider a loan modification plan. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
Those who are afraid of bankruptcy are entirely justified; it often can be a frightening experience. Now that you have read this article, you now never again have to be scared of bankruptcy. 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.
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