Keeping Your Head Above Water When Bankruptcy Is The Option

Debt is one of the scariest things to live with. Sometimes it happens quite quickly, from some financial problems to losing all control in a matter of weeks or months. Sadly, it is not as easy to fix it once you get there. The article you are about to read will give you advice on dealing with your debts through bankruptcy.

You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. 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.

When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.

Seek a less serious option prior to filing for bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.

Chapter 7

There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. Chapter 7, for example, will wipe away every one of your outstanding debts. Any debts that you owe to creditors will be wiped clean. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Look into both types of bankruptcy before deciding which one would suit your particular needs.

Before filing for bankruptcy ensure that the need is there. You may be able to manager gets more easily by consolidating them. Bankruptcy is a stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.

Find out more about Chapter 13. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. Expect to make payments for up to 5 years before your unsecured debts are discharged. Keep in mind that missed payments will trigger dismissal of your case.

It is in your best interest to be abreast of your rights in petitions for bankruptcy. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.

Act at the right time. When filing for personal bankruptcy, it is very important that you act at the correct time. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.

Don’t overly concern yourself with any negative feelings you are having. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. Continuing to let yourself feel that way can damage your emotional health and does not benefit you in your endeavors to deal with your financial situation. To best deal with filing for bankruptcy, look for the positives in the situation.

Don’t wait to file for bankruptcy. Some people will just ignore their outstanding debts, hoping that someone or something will come and save them, but this never ends well. Debts can multiply very quickly, and can result in you losing money to wage garnishment, or even losing assets that are part of a secured loan. Consider all possible options before filing bankruptcy.

Personal Bankruptcy

Before petitioning, you need to know what the personal bankruptcy rules are first. There are many issues with personal bankruptcy code, and these pitfalls can cause problems with your case. There are mistakes that may cause the dismissal of your case. Before you go ahead, devote a little time to research and the topic of personal bankruptcy. This can save you a lot of time and make the entire process easier.

Consider all available options before deciding to file for personal bankruptcy. Credit counseling may work for you. You can get the help you need from a variety of non-profit credit counseling companies. These companies work with creditors to reduce your payments and interest. All you have to do is give them your payments and they handle paying the creditors.

Under no circumstances should you take out a huge cash advance on any of your open credit cards before filing for bankruptcy. This will be viewed as fraud, and you may be held responsible for the balances despite your bankruptcy filing.

Typically, people who have faced bankruptcy swear off credit cards. This is not a good decision on their part because credit cards help in building good credit. If you never use credit, you won’t be able to rebuild the good credit that you will need to make future purchases. Keep it simple with one card and take a slow approach to rebuilding.

Sometimes in life things just happen which are out of your control. Hopefully, this article’s advice has shown you that there are still plenty of steps you can take to improve your situation even when bankruptcy is in the picture. Use the tips written in this article to make a big difference in your finances.

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