Once you are faced with the possibility of losing treasured items like jewelry or cars, this can make you shy away from the IRS. Put an end to the collection calls and come up with a plan that may involve filing for bankruptcy. Keep reading for useful tips to help you through the process.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. You have other choices, including consumer credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
You must be absolutely honest when filing for personal bankruptcy. If you try to hide any of your information, it will eventually surface and cause you problems. It is important that you are completely transparent, showing everything financial that needs to be known. Telling the truth will allow you reach a solution that is feasible, given your current situation.
Personal Bankruptcy
Find a specialized lawyer if you are thinking about filing for bankruptcy. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. A personal bankruptcy attorney can help and guide you along through the bankruptcy process.
Investigate any new laws before deciding to file a bankruptcy. These laws change regularly and you should stay up-to-date so you can make the best decisions. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Consider other alternatives before filing for bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Safeguard your most valuable asset–your home. Filing for bankruptcy does not mean you have to lose your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Investigate your other alternatives before you decide you have to go with bankruptcy. You may be able to manager gets more easily by consolidating them. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. Your future credit will be affected by these actions. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Chapter 13
Consider Chapter 13 bankruptcy for your filing. With a consistent income source and less than $250k in debt, try filing for Chapter 13. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
Avoid filing for bankruptcy if you make more money than your monthly bills. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.
If you are forced to file for bankruptcy, you should avoid being ashamed of yourself. Going through the filing process often brings out the worst in people, causing them to feel a variety of negative emotions. These feelings can cause you to make rash decisions and cause psychological problems. To best deal with filing for bankruptcy, look for the positives in the situation.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. This is fraud, and you will be required to pay that money back.
Be cautious if you are planning to pay off any of your debts before you file for bankruptcy. Bankruptcy laws prohibit some creditor payoffs within 90 days of filing. When it comes to family members, a year is the cutoff for payoffs. Read the rules before making financial decisions.
If you feel that bankruptcy filing may be right for you, seek some legal advice first from a specialist lawyer. The complexities of the process of filing, court proceedings and other issues can best be handled by a competent lawyer. An attorney can also complete the required paperwork and provide advice as you go through the process.
About two months after you’ve done bankruptcy, you can get copies of your various credit reports from the three agencies. Make sure that the report accurately represents your discharged debts and closed credit accounts. If anything is incorrect, then follow up quickly and start repairing your credit.
One common contributing factor for bankruptcy is the financial consequences of filing for divorce, so make sure to consider your plans carefully. Many people divorce, and then need to file bankruptcy because they could not see what troubles laid waiting for them. Thinking divorce through is the smart thing to do.
While personal bankruptcy is a valid option, you should consider the other options available to you before making your final decision. Keep in mind that many scam debt-consolidation services have sprung up since the increase in bankruptcies, so do your homework before choosing one. Avoid debt in the future and make good financial choices by committing the tips presented here to memory.
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