Do not consider bankruptcy until you have researched your other options. Most people cite the economy for having to file for bankruptcy. If you decide to file, it’s crucial that you are well educated on the subject of personal bankruptcy, so you are able to make proper choices. This article is going to give you that knowledge.
Credit Card
Do not use a credit card to manage your tax issues and then try to file bankruptcy. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
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. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. Bankruptcy exemptions are properties may not be seized during bankruptcy. Be well prepared for bankruptcy by reviewing this list. It will tell you whether are not the things you value most are subject to seizure. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Ensure that your meeting is actually with the attorney, not with a paralegal or an assistant. People in these positions are unable to offer legal advice. Interviewing multiple attorneys is a good way to find the best fit.
Chapter 13
Chapter 13 bankruptcy might be a good option, so don’t overlook it. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Always make your loved ones a priority. Going through bankruptcy is difficult. The long process can leave people stressed out and racked with guilt and shame over having their financial affairs laid out for everyone to see. Many people tend to hide until their process is completed. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.
Reducing Interest Rates
You should weigh every option before thinking about bankruptcy. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If you are facing foreclosure, consider a loan modification plan. A good lender will be able to assist you in a variety of ways, from getting rid of your late charges to reducing interest rates. You may even be able to get a loan extension, giving you the extra time you need to pay your debt off. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
If you are moving forward with a Chapter 7 bankruptcy, you need to learn how that can negatively affect anyone who shares loans with you. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. Although, your creditors may insist that the co-debtor pay off the entire debt.
Pick the right time to file. Proper timing is important, especially when it comes to 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. Have a chat with a bankruptcy specialist to discover when the ultimate time would be for you to file.
Be certain to have a good understanding of bankruptcy regulations prior to filing a petition. For instance, for 365 days before filing, no one is able to receive assets from the filer. Also, a person cannot legally increase their debt amount on credit cards prior to filing.
As you are no doubt aware, bankruptcy is much talked about in today’s economy. If you want to know that you are doing the right thing when dealing with your bankruptcy be sure to put the information you read in this article to use.
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