The Top Bankruptcy Tips You Cannot File Without

Bankruptcy is a two-sided coin: relief/stress. On one hand, people will be scrutinizing your private financial affairs. The positive is that once the process has been completed, you will be debt-free and free of harassment from creditors. Keep reading for a few smart suggestions for making bankruptcy a smoother process.

If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Because of this, transferring the debt to your credit card is pointless.

If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.

Don’t file for bankruptcy unless it’s absolutely necessary. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Filing a claim can take a long time and cause much stress. It will also limit your ability to get credit for the next few years. Because of this, filing for bankruptcy should only be used as a last resort.

Chapter 13

Consider filing using chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. You can secure your home under Chapter 13 and pay your debts with a payment plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.

Before going through the Chapter 7 filing process, ensure that your co-debtors are abreast of any implications relating to this process. When you file a Chapter 7, your debts will be dissolved. However, your creditors will be able demand that your co-debtor pays the debt off in full.

Try your hardest to present a complete representation of your current financial situation. Failing to list these could cause the dismissal or delay of your bankruptcy petition. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. This financial information may include income from side jobs, vehicles you own and loans you have not paid off.

Credit Cards

Lots of individuals who filed bankruptcy vow to never again use credit cards or lines of credit ever again. In reality, though, credit cards can be a useful tool for people who are looking to rebuild their credit score after bankruptcy. If you don’t use your credit, you won’t be able to make big purchases on credit in the future. To start, use one credit card sparingly and pay it off in full each month.

Before you file, make the choice to be fiscally reliable. It is important not to make your debt larger just before bankruptcy. Bankruptcy judges and creditors may examine current and past behavior as they work to resolve your case. Your most recent behavior should show that you realize the error of your ways and have changed course to become more fiscally responsible.

Write down every one of your debts. The list will be a fundamental element of your bankruptcy petition, and therefore it is important not to omit anything. Go over all your financial records and do not forget anything. Take care not to miss any debts that you need to disclose, or you will be responsible for paying them back after you have filed for bankruptcy.

Choose a bankruptcy attorney carefully. This type of law is a popular attraction for inexperienced newcomers. It is crucial that your lawyer has the proper licensing and has plenty of experience. Information on lawyers and their ratings by clients can be found on the Internet.

If you get a job prior to filing for bankruptcy, do not let your job slow down the process. It may still be a good idea to go ahead with the bankruptcy. The timing of your bankruptcy is a big deal. If you file before gaining more income, you have a better chance of having your debt discharged.

There are positives and negatives when you file bankruptcy. No matter why you have decided to file, remember that knowledge is power when it comes to managing the situation. What you read above can easily help you get a handle on the entire process. Use these tips to empower yourself before, during and after your bankruptcy.