The economy is bad looking these days. When the economy tanks, many people lose jobs and accumulate debt. Deep debts usually wind up in bankruptcy. This is not a pleasant situation. If you, a friend, or a loved one is in financial trouble, this article could help decide if bankruptcy is the right option.
Do not pay your taxes with credit cards that will be canceled when you file for 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. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. Because of this, transferring the debt to your credit card is pointless.
Bankruptcy Petition
Always be honest and forthright when it comes to your bankruptcy petition. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
The best way to build your credit up after a bankruptcy is making all your payments on time. If you find yourself in this situation, you may want to think about getting a secured card or two. If you pay what you owe back promptly at all times, you can show that you are taking steps to be responsible about your payments and credit rating. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring 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. 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.
Research Chapter 13 bankruptcy, and see if it might be right for you. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. The process of bankruptcy can seem brutal. Having to declare bankruptcy leaves many people feeling like a failure. It is not uncommon for a person to feel the need to pull away from loved ones during the process. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Spend time with your family, talk about your problems and find things that relax you.
Filing for bankruptcy should not be done on a whim. 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 foreclosure is imminent, see if your loan can be altered at all through a modification plan. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Bankruptcy affects people from all walks of life. There are some things that can be done to prevent filing for personal bankruptcy even for those who have no steady income. Hopefully these tips will help you. Hopefully, everything works out for you!
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