If you have more debt than you could ever hope to pay off, you might feel like your life is over. Sometimes it happens quite quickly, from some financial problems to losing all control in a matter of weeks or months. Unfortunately, this problem is difficult to fix, once you realize you have it. The piece that follows does offer some guidance about how to handle bankruptcy when your burden becomes to much to bear.
Credit Card
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. You should never touch your retirement accounts, unless you have absolutely no choice. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
When it comes to informing your attorney about your case, don’t be fearful. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. All information submitted to the court with your signature needs to be double checked.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. Bankruptcy exemptions are properties may not be seized during bankruptcy. You can determine exactly which of your possessions are at risk by consulting this list before you file. This will ensure that you do not have any surprises once you have filed bankruptcy.
Don’t file for bankruptcy until your represented by an attorney. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Do some research about these options so you can choose the best one. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Interest Rate
Look at all the alternatives to bankruptcy before filing. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. You can apply for a modification of your mortgage if your home is going into foreclosure. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
If you’re concerned about the details of keeping your car, try to ask your attorney about details regarding lowering your monthly payments. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. In order for this to succeed, you must have bought your car in excess of 910 days before filing, have a higher interest loan for it as well as a consistent work history.
When you file for bankruptcy, you should be very aware of your rights. Some debt collectors like to say that you cannot file for bankruptcy on these debts. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Get the word “shame” out of your head when filing for bankruptcy. The bankruptcy process makes people feel guilty and ashamed. These feelings, however, are of no benefit to anyone, and they can be detrimental to your mental health. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
It is acceptable to find yourself overwhelmed and turn to bankruptcy to get out of trouble. Yet, you can take better control of your future and plan out how you are going to secure your finances, for life. Apply the advice from this article and you will be on your way to realizing financial freedom.
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