Nowadays, the economy is not in very good shape. With a bad economy means that more and more people are losing jobs and getting in debt. Debts result in bankruptcy, which is never a good thing. If a family member or a loved one is on the verge of filing for bankruptcy, the following article can help you understand more about the process and whether it offers an appropriate solution.
Visit web sites and read information to learn as much as possible about the topic of personal bankruptcy. You can learn a lot on the U.S. Some valuable resources include the U.S. Dept of Justice and American Bankruptcy Institute. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. A common rule is that dischargeable tax means dischargeable debt. It is pointless to use credit cards if they can be discharged.
Retirement Accounts
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. You should make every effort to leave your retirement accounts untouched until your retire. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Be sure to bring anything up repeatedly if you are unsure if your lawyer is focusing on it. Don’t just assume that the attorney will remember it automatically. Don’t fear speaking up since it affects your case and future.
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. If this happens to you, think about applying for a couple of secured credit cards. When you do this, it shows your determination to fix your credit history. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.
If a personal recommendation comes your way, this should be a lawyer you focus on. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Investigate any new laws before deciding to file a bankruptcy. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Safeguard your most valuable asset–your home. Filing bankruptcy does not necessarily mean that you will lose your house. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Interest Rates
Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If you are about to lose your house, talk to your lender about a loan modification. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. However, there are steps which must be taken to ensure you are within the law of bankruptcy. Your bankruptcy custodian will need to approve the loan. You need to show them why and how you can handle paying back the new loan. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
It is important to understand your rights when you file for bankruptcy. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
Act at the right time. When it comes to filing for personal bankruptcy, timing is everything. For some people, filing right away is best, however for others, waiting a while is best. A lawyer is in the best position to evaluate your case and figure out when you should file for bankruptcy.
While the economy may be improving somewhat, lots of people remain unemployed and in financial turmoil. Even when your financial situation is not producing enough income, there are some things one can do in order to avoid bankruptcy. Hopefully this article has provided you with some tips to keep yourself, or someone else, from having to file for bankruptcy. I wish you the best of luck.
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