If you are faced with the threat of repossession of valuable assets, you may become terrified of the IRS. End calls from debt collectors and gain control over your finances by filing for bankruptcy. Keep reading for useful tips to help you through the process.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. If the tax has the ability to be eliminated, the debt can be too. It is pointless to use credit cards if they can be discharged.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. You are in this situation, now help them to give you the best assistance possible to deal with it. You do that by giving full disclosure and holding nothing back.
Chapter 7
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. If Chapter 7 is what you file, your debts will get eliminated entirely. Any ties you have concerning creditors will definitely be dissolved. Bankruptcy under the rules of Chapter 13, on the other hand, require you to work out a payment arrangement to pay back the agreed upon amounts. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
If you make more money than what you owe, filing for bankruptcy is not a good option. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
Investigate other alternatives before resorting to bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. If a foreclosure is your reason for filing look into your options with your bank first, such as a loan modification. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Ultimately, creditors want their money, and many times repayment plans are preferable to a debtor that is bankrupt.
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. However, creditors can demand co-debtors pay the amount in full.
If you are filing for bankruptcy, it is imperative that you have a good understanding of your rights. It is not unusual for creditors to claim that their debt is not able to be discharged. There are few debts that can’t be discharged. 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.
Be decisive at the correct moment in time. They say timing is everything, and this rings true when filing for bankruptcy. For some people, filing right away is best, however for others, waiting a while is best. Speak to a bankruptcy lawyer to determine what the ideal timing is for your personal situation.
Always look into other options and make personal bankruptcy your last resort. Most debt consolidation companies aren’t legitimate and will make your debt worse. Remember to use the tips from this article, and make good financial choices to avoid future debt.
This is a limited-time offer. We are not able to guarantee availability if you wait!
