Drowning in debt can be overwhelming. In a quick amount of time, you can go from being in a tiny bit of debt to a situation that suddenly spirals out of control. Unfortunately, it is not simple to fix. This article will provide suggestions on handling bankruptcy if you find yourself completely overwhelmed.
Credit Card
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Be certain you are making the right choice before you file for bankruptcy. You have other choices, including consumer credit counseling. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Don’t be afraid to remind your lawyer about important aspects of your case. Don’t assume that he will remember something you told him weeks ago. Don’t fear speaking up since it affects your case and future.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. Whomever you use to file with must know everything there is to know about your finances, both good and bad. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Do some research about these options so you can choose the best one. If you do not understand what you are reading, talk to your attorney before making that serious decision.
Chapter 13 Bankruptcy
Research Chapter 13 bankruptcy, and see if it might be right for you. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. Loan modification plans can be helpful for those facing foreclosure. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
If you are worried about your car being repossessed, consult your attorney about trying to get the monthly payment lowered. Chapter 7 usually can help payments be lowered. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. When filing Chapter 7, you are not longer liable for the debts that you and a co-debtor signed for. However, if you had a co-debtor, they will be required to pay the debt.
When a bankruptcy becomes a possibility, you should look at retaining a lawyer. A bankruptcy attorney will advise you of the necessary steps to file bankruptcy as well as represent you in bankruptcy court. Your attorney may also help you with any questions you may have, as well as assist you in completing the paperwork you need to complete.
There are certain life events that you have no control over. The above article has provided you with advice to allow you to handle your finances and deal with the option of bankruptcy. It is time to take action and fix your problems.
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