If you have had any of your possessions repossessed by the IRS, personal bankruptcy may be an option for you. Bankruptcy will hurt your credit, this is true. However, it may be the only viable option available to you. This article will help you learn many things about bankruptcy.
Lots of people have to claim bankruptcy when their bills are larger than their income. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state. For example, the personal home is exempt from being touched in some states, but not in others. Make sure you know the laws where you live before you file.
Think through your decision to file for bankruptcy carefully before going ahead with it. You have other options available like consumer credit counselling services. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Determine which assets won’t be seized before filing for bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Chapter 13
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All creditor relationships will be severed. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Take the time to learn more about these different options so you can make the best decision possible.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Before making any decisions, discuss the information you have learned with your lawyer.
Don’t be tempted to race toward a bankruptcy without taking time to make sure it is the right thing for you to do. Consolidating current debt could make it easier to manage. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. The future of your credit will be greatly affected. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Debt Repayment
Think about all the choices available to you when you file for 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 looking at foreclosure, think about a loan modification program. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. The vehicle must have been obtained more than 90 days before filing and be a loan with high interest. You must also have consistent work history.
In conclusion, the option of bankruptcy is always there. Of course, it may not be best for all situations and can even make your credit matters worse. Learning how to manage this situation can minimize your headaches and prevent repossession of valuable property.
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