There are many people who are now in debt levels over their heads. They are harassed by collection agencies and creditors and cannot get their finances under control. You may have found yourself in the same situation, and you should know that bankruptcy could be a good option for you. Continue on to the article below to see if bankruptcy is the right option for you.
Credit Cards
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
If filing bankruptcy is in your future, don’t waste any savings you may have attempting to pay off your debts. Retirement accounts should never be accessed unless all other options have been exhausted. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Be sure to remind your lawyer if it seems that some details of your situation are forgotten. Lawyers are people too, and sometimes they forget important information and need to be reminded. Your case and future are affected by the attorney’s action, so never be afraid to communicate.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Keeping secrets or trying to outsmart everyone is not a wise move.
See if there is an alternative you can use before declaring bankruptcy. For example, if your debt is small, try a type of consumer counseling program. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
60 Month Period
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 involves the elimination of all of your debt. Your responsibilities to your creditors will be satisfied. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Protect your home. Bankruptcy filings do not necessarily mean that you have to lose your house. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Remember to spend some quality time with your loved ones. Going through a bankruptcy can be an excruciating experience. It is long, full of stress and leaves individuals having feelings of shame and guilt. Some people do not even want to speak with others until the bankruptcy is official. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. Spend time with your family, talk about your problems and find things that relax you.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. But, it could be harder. You will have to see your trustee and the approval for this new loan. You will need to come up with a budget and show that this new loan payment schedule is doable. Be ready to justify the purchase that you need the loan for, too.
Know your rights when filing for bankruptcy. Occasionally, debt collectors will attempt to convince you that your debt isn’t eligible for bankruptcy. There are not many debts that can not be bankrupted, student loans and child support for example. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Don’t overly concern yourself with any negative feelings you are having. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. But, such emotions get you nowhere, and they can cause significant mental issues to emerge. Focusing on the positive during this stressful time is a good strategy for coping with your ordeal.
Include your entire financial information when you file for bankruptcy. Leaving out information either purposely or by mistake can prolong your petition, or have it dismissed completely. Add absolutely everything to your list, including small amounts. Current loans, second jobs and assets ought to be included.
If you plan to pay debts off before you file for bankruptcy, be careful. Bankruptcy law may actually prevent you from repaying your credits for three months. Worse, if you’ve taken out a loan from your family, you can’t repay them for a whole year before filing. Know the laws prior to deciding what you are going to do.
As you can see, there is a lot of help available if you are considering filing for personal bankruptcy. By approaching bankruptcy proceedings with a clear frame of mind, you can use the process as a valuable tool to help you rid yourself of debt and get on with your life.
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