Keeping Your Head Above Water When Bankruptcy Is The Option

Before you file for bankruptcy, make sure you have considered all your options. Many people feel embarrassed or ashamed if they have to tell other people that they are bankrupt. Don’t give into it and be sure to use this advice to figure out what you need to know to avoid bankruptcy.

You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. This makes using a credit care irrelevant, since bankruptcy will discharge it.

Make sure you’ve exhausted all other options prior to declaring bankruptcy. Look into other options, such as consumer credit counseling. 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.

It should go without saying, but refrain from lying in your bankruptcy filings. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.

Once you file for bankruptcy, you will have a hard time getting loans or credits. This being the case, look at secured card options. By doing this, you will be letting people know that you want to fix your credit score. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.

Investigate any new laws before deciding to file a bankruptcy. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.

Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. For example, consumer credit counseling programs can help if your debt isn’t too large. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.

You need to educate yourself on the differences between Chapter 7 and Chapter 13. Every one of your debts will be gone if you decide to go with Chapter 7. You will no longer be liable for any money that you owe to your creditors. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.

Chapter 13

Research Chapter 13 bankruptcy, and see if it might be right for you. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. The length of the plan is generally up to five years, and when this is over, you will be free of 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.

There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Filing under Chapter 7 is usually a good way to lower your payments. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.

Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. When you file a Chapter 7, your debts will be dissolved. Your creditors can then come after your co-debtor for full repayment of the debt.

Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. Be certain that you hire a competent lawyer to minimize the stress and anxiety you are under. Do not let price be the only factor. The cheapest attorney may not be the best, but the most expensive may not be the best either. Look to the bureau for better business, consultation, as well as others who have formerly experienced bankruptcy for more information about lawyers. You can attend court hearings if you want to see a prospective attorney in action.

As you can now see, you do not have to let bankruptcy consume your soul. The tips from this article can now guide you on the right path to avoid bankruptcy. Use what you’ve learned here to see how much you’re able to change things now so you aren’t harming your credit history.