Simply mentioning the word bankruptcy can cause people to become nervous and worried. It is only natural that people are afraid of skyrocketing debt that causes hardship for themselves and their family members. If that thought scares you or if you’re already living in this horror, you can use this advice.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. 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. This means using a credit card is not necessary, when it will just be discharged.
It should go without saying, but refrain from lying in your bankruptcy filings. You can lose the right to file bankruptcy now or in the future if you try to withhold information about your assets and income. So it is critical that you disclose everything honestly to to avoid that and any other penalties the trustee might impose if he discovered your attempt to hide information from the court.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. A great way to rebuild your credit is to apply for a prepaid credit card. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
When a bankruptcy is imminent, retain a lawyer immediately. Filing for bankruptcy is complicated and there is no way you can understand all you need to know. A personal bankruptcy lawyer will be able to help you and ensure you are doing things the proper way.
Be sure to weigh all of your options before deciding to file for personal bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Chapter 7 Bankruptcy
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. In Chapter 7 bankruptcy, your debts are all eliminated. Any debts that you owe to creditors will be wiped clean. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Learn the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. Before making any decisions, discuss the information you have learned with your lawyer.
Be sure you have no other choice but to seek bankruptcy. Many times a consolidation loan will ease your financial struggles. Bankruptcy is a long process that can be stressful. You will have trouble getting credit down the line. Because of this, you should be sure that bankruptcy is your only option before you file.
Unsecured Debt
Consider filing using chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Some bill collectors will tell you that your debts can’t be bankrupted. However, there are few debts that cannot be eliminated, like student loans and child support payments. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
Exhaust all other option prior to filing personal bankruptcy. Perhaps credit counseling can resolve your issues. There are some good non-profit organizations that could help you. They’ll talk to creditors and strive to get both your payments and interest rates lowered. They pay your debts and you repay them.
Before you file bankruptcy, consider how you will pay off your debts. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Read up on the rules before you make any decisions about your finances.
Many people who file for bankruptcy vow to stop using credit cards. This is actually a poor idea because credit helps to build good credit. If you don’t use your credit, you won’t be able to make big purchases on credit in the future. Start with having a single credit card to help you go in the proper direction.
People who are afraid of bankruptcy have good cause to be; the process can be scary and stressful. Instead of living in fear, read this article for advice. Apply this advice to improve your situation for yourself and any loves ones.
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