If your debts have skyrocketed out of control and you are considering filing for personal bankruptcy, worry no more. On the Internet lives plenty of information on how you can avoid bankruptcy. If you are ready to consider alternatives to a bankruptcy filing, the advice presented here may help.
Learn as much as you can about bankruptcy by going to informational websites. You can learn a lot on the U.S. Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
Credit Cards
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay 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. It is pointless to use credit cards if they can be discharged.
Before undertaking the bankruptcy process, ensure you have made the correct decision. Consider any other options that are available to you, such as consumer credit counseling. Be sure to consider all options before filing for personal bankruptcy, as this will take a large toll on your credit score for the next ten years.
Before filling for bankruptcy, determine which assets will be exempted from seizure. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you fail to do so, things could get ugly.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. One example would be that a consumer credit program for counseling if you have small debts. 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.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. Your ties with all creditors will get dissolved. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Go ahead and file for personal bankruptcy as soon as you realize it is necessary. Lots of people turn the other shoulder towards their financial woes and hope that they’ll disappear eventually. However, you should never do this. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. Consider all possible options before filing bankruptcy.
As you are heading towards a bankruptcy filing, don’t be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. That is considered fraudulent behavior, and you can still have to pay the credit card back, bankruptcy or no.
Be cautious if you are planning to pay off any of your debts before you file for bankruptcy. You might be legally unable to file for bankruptcy if you were still paying your creditors ninety days ago, or your family members a year ago. Find out more about legal requirements before making your decision.
Make a quick decision to be more responsible fiscally before filing. Be certain not to incur extra debt or increase the amount of debt you already have. Creditors and judges will consider both past and current history when deciding on your personal bankruptcy. You should show them that your current spending behavior is being worked on by how you spend now.
Rethink getting divorced if you are in a bad financial situation. Many people find themselves filing for bankruptcy after a divorce. Thinking divorce through is the smart thing to do.
Some attorneys offer a phone service for free where creditors will be referred to when they wish to contact you regarding an account that’s delinquent. You can just give them the number and they can call for confirmation that your debt is indeed part of a bankruptcy. By doing this, you can stop these calls from occurring again.
In the event your case for bankruptcy is dismissed due to an error you made, you may be able to file again. But, most of the time, you only get an automatic stay for thirty days after filing if the case was previously dismissed. You may find it possible to have this stay extended by meeting with the judge and demonstrating that the reason you need to re-file is a good one.
Credit Card
If most of your debt is from taxes, you are probably better off not filing for bankruptcy. Some people use a credit card to pay taxes, and shortly thereafter, they file for bankruptcy. Do not assume that the credit card debt you incurred by charging your taxes will be wiped out with a bankruptcy filing. However, there are already bankruptcy laws in place for this. This will leave you with owed taxes and then credit card interest for it, too.
If you plan well, you can improve your financial situation. The more time you can obtain for yourself, the better off you will be. That said, this only makes sense if you are making progress in solving your financial problems. Now start planning things out and setting yourself up for the future.
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