Deciding to file for personal bankruptcy is a major life decision, and should not be jumped into lightly. Check out the advice found below so that you can know what you are up against when faced with bankruptcy. Then, you can make a decision based on what you learn.
Credit Card
Don’t use a credit card to pay off your taxes before filing for 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. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. This means using a credit card is not necessary, when it will just be discharged.
It is important to remind your lawyer of any details that may be important to your case. Don’t just assume that the attorney will remember it automatically. Speak up if something is troubling you, as this is your future we are talking about here.
Weigh all of your options before declaring bankruptcy. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. If you do not understand what you are reading, talk to your attorney before making that serious decision.
Before filing bankruptcy consider every available avenue. You may be able to manager gets more easily by consolidating them. The bankruptcy process takes forever to finish and is very nerve-wracking. It will have a major effect on your credit as time goes on. Before you decide to file for bankruptcy you want to be absolutely certain that it is the only way to resolve your problems.
Chapter 13
Thing about filing a Chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. However, if you miss even one payment, the court will dismiss your entire case.
When you are filing for bankruptcy, make sure you list all of the financial information you may have. If you forget any items, your filing could be rejected. It is better to have something on there that you are unsure about, rather than not include it at all and risk a dismissal. This might take the form of odd jobs, extra cars and outstanding personal loans.
Don’t file for personal bankruptcy until you’ve looked into your other options. You should consider credit counseling. There are even non-profit companies that may be able to help you. They can negotiate with each of your creditors to work out payments that you can afford, along with reduced interest rates. The payments you make go to the credit counseling company, and they send that money to your creditors.
Be careful on how you pay your debts before you file a personal bankruptcy. Bankruptcy laws generally don’t cover situations which occurred within a short time frame prior to filing, such as the previous 90 days worth of credit card debt. Know the rules before you jump in feet first.
It is important not to delay the process of determining whether or not you should file for bankruptcy. It’s hard to admit you need assistance, but the longer you decide to wait, the worse the debt can get. By consulting a professional, you will be able to get the advice that you need before everything gets too complicated.
Bankruptcy isn’t simple and immediate. You must do a wide variety of things correctly. The tips you have read here were designed to give you an advantage when filing. By using them, you can sure that you’re doing everything by the book and that you won’t be caught by surprise.
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