If you have had any of your possessions repossessed by the IRS, personal bankruptcy may be an option for you. Filing for personal bankruptcy may be the only option available to you; even though, it can be very hard on your credit rating. Read this article to learn more about filing bankruptcy and the consequences from doing so.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Credit History
Ask yourself if filing for bankruptcy is the right thing to do. You can also avail yourself of other options, such as consumer credit counseling. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Do not hesitate to remind your lawyer of any details regarding your case. It is wrong to assume that your lawyer will remember every word you ever utter! Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Do not despair, as it’s not the end of the world. Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. If it has been fewer than 90 days since you filed for bankruptcy, it is possible for you to get repossessed property back. Consult with a lawyer who can help you along with filing the petition.
Don’t file for bankruptcy until your represented by an attorney. Personal bankruptcies are detailed and complex processes, and you may miss something that costs you money. A qualified bankruptcy attorney will guide you through the steps and help you do everything properly.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Personal Bankruptcy
Make sure that you really need to file for bankruptcy. You may well be able to regain control over your debts by consolidating them. There is not easy process associated with personal bankruptcy. It will also limit your ability to get credit for the next few years. Personal bankruptcy should be undertaken as a last resort when no other workable options are available to you.
Avoid filing for bankruptcy if you make more money than your monthly bills. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
Don’t automatically assume that bankruptcy is your only option. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. Look into loan modification plans if you need to deal with an imminent foreclosure. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. The bankruptcy process can make many people feel ashamed, guilty and unworthy. These feelings, however, are of no benefit to anyone, and they can be detrimental to your mental health. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
Because bankruptcy is such a challenging time that a great deal of stress, both mental and emotional, may be involved. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Make your hiring decision based on several criteria, not just on price. It may be not be necessary to hire a costly attorney; just make sure he or she is qualified to handle your case. Talk to friends who have been through a similar situation and ask them for referrals. Try to get a referral from a trusted friend or family member.
As your read at the start of this article, there is always the option of personal bankruptcy. The consequences for your credit make it a last resort in most cases. As long as you’re properly informed about which moves to take and when, you should have little trouble navigating the process and ultimately restructuring your credit.
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