It can be very hard to live with bankruptcy. As you look at the hole you’ve dug yourself, you might think there is no escape. Even if your credit score isn’t good, you may still find that there are ways to get a home loan or a car.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Because of this, transferring the debt to your credit card is pointless.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. You should always keep money saved for worse times. If you do have to dig into your savings, make sure that you leave enough to sustain you and your family for a couple of months.
Don’t be afraid to remind your lawyer about important aspects of your case. Just because you have told him something of importance that he will remember it. All information submitted to the court with your signature needs to be double checked.
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Learn what you can about Chapter 13 bankruptcies. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
Repayment Plan
Don’t automatically assume that bankruptcy is your only option. You can get your interest rates reduced or enter into a debt repayment plan. Before you file bankruptcy, ask your attorney if any of these are viable alternatives for you. You can apply for a modification of your mortgage if your home is going into foreclosure. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Make sure you consider implications of bankruptcy before filing for Chapter 7. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. But, creditors will ask for the money from your co-debtor.
Look at bankruptcy as a chance to mature and take responsibility for your personal finances. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. These feelings do not help you and provide no value. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
With time, things will get better credit-wise for you, despite your having previously filed for bankruptcy. By becoming more of a financially responsible individual, creditors will get the picture that you’re trying to dig yourself out of a hole. Begin saving today, and you’ll surely notice the difference in others’ perception of you when you apply for an important loan such as a home or car loan.
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