Although unhappy circumstances in your life might have led you to file for bankruptcy, your life post-bankruptcy can be much better. You are being given the opportunity to start again with a debt-free slate. Don’t look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.
A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. Study the laws in you state to learn what you need to do and what your options are. The laws governing bankruptcy vary from state to state. For instance, your home might be protected in some states while you might lose it in others. It is important to understand the laws in your state before filing for bankruptcy.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Retirement accounts should never be touched if it can be helped. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
Secured Cards
Getting unsecured credit post-bankruptcy will likely be difficult. If that is the case, you should try applying for one, or two secured cards. This will demonstrate that you’re seriously trying to restore your credit. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. You are in this situation, now help them to give you the best assistance possible to deal with it. You do that by giving full disclosure and holding nothing back.
Think carefully about your different options before filing for bankruptcy. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Chapter 7
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 bankruptcy completely wipes out your debt. All the things that tie you to creditors will go away. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. Take the time to learn more about these different options so you can make the best decision possible.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Seeking out different attorneys is all part of the process until you find someone that you can trust.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Spend time researching the advantages and disadvantages of filing for each one of these. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
The events that lead someone to declare bankruptcy can cause great emotional distress. Nonetheless, filing for personal bankruptcy can be a watershed moment. Bankruptcy may well represent the point where you turn your life around, and you can handle it better by making use of the suggestions this article has provided.
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