Just thinking about bankruptcy can frighten people. Not being able to provide for their loved ones and debt that continues to mount is an issue for many. If you’re afraid of this scenario (or worse if you are living at), it is our sincere hope that the advice given here will be of help to you.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Be sure you’re doing what’s right before you file for bankruptcy. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Unsecured Credit
Getting unsecured credit post-bankruptcy will likely be difficult. If that’s the case, it is beneficial to apply for one or even two secured cards. This at least shows you are making an honest attempt at reestablishing your credit worthiness. After some time passes they may be willing to offer you unsecured credit.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. There may still be way to get repossessed items back after you file for bankruptcy. There is a chance that you can get back your property if it has been less than ninety days since repossession. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
Consider other alternatives before filing for bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. Should you choose Chapter 7, your total debt load will be erased. The ties with the creditor will be broken. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. Take the time to learn more about these different options so you can make the best decision possible.
Find out more about Chapter 13. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. 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 miss even one payment, the court will dismiss your entire case.
Don’t isolate yourself from family and friends. Bankruptcy can take a toll on you. At the end of the process, many people are left with feelings of shame and worthlessness. A lot of people hide away until the entire proceedings have been played out. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
When your income surpasses your bills, you should not be filing bankruptcy. 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.
Those who fear bankruptcy have a good reason to do so: It can be a downright scary experience! You might have been worried about it before, but this article can put those fears to rest. Take these bankruptcy tips to heart and start improving the lives of you and your family members.
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