It can be hard to file bankruptcy. When you notice you are in money troubles, you also notice that you might not have many financial options. However, even if you have a poor credit score, you can still live your life and get some of the things you are looking for, like a car or a home.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Retirement Accounts
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Don’t touch retirement accounts unless you don’t have a choice. Your savings accounts offer valuable financial security so try to leave them intact.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Do not assume that if you’ve already told him or her something important once, that they will remember it later without a reminder. Speak up, because it is your future on the line.
Credit Cards
After a bankruptcy, you may not be able to receive any credit cards. If this happens to you, think about applying for a couple of secured credit cards. By doing this, you will be letting people know that you want to fix your credit score. After a time, you are going to be able to have unsecured credit cards too.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are a number of companies who may take advantage of your situation, so always work with someone that is trustworthy.
Learn all the latest laws before you file bankruptcy. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Interviewing multiple attorneys is a good way to find the best fit.
It is possible to keep 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.
Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. But, creditors will ask for the money from your co-debtor.
Make sure you understand your rights as you file for bankruptcy. Bill collectors can try to scare you into believing that your debt will not be cleared. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
In time you will leave the effects of bankruptcy behind you and resume your normal life. Saving your money goes a long way to show your lenders concrete proof that you are serious about reestablishing your credit. Start now, and by the time you need a home loan or car, you may be able to get one.
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