There is no doubt that the current economy is a challenging one. When the economy tanks, many people lose jobs and accumulate debt. Too much debt leads to bankruptcy, which can be an extremely traumatic experience. If a family member or a loved one is on the verge of filing for bankruptcy, the following article can help you understand more about the process and whether it offers an appropriate solution.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. A common rule is that dischargeable tax means dischargeable debt. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. 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.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. You are in this situation, now help them to give you the best assistance possible to deal with it. You do that by giving full disclosure and holding nothing back.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. It is important to meet with the actual attorney, not the attorney’s assistant or paralegal; those people are not permitted to give legal advice Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Chapter 13 Bankruptcy
Research Chapter 13 bankruptcy, and see if it might be right for you. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. 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. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
Always make your loved ones a priority. Going through a bankruptcy is never easy. It is long, full of stress and leaves individuals having feelings of shame and guilt. Lots of people decide they should hide from everyone else until it is all over. Isolating yourself from your loved ones can lead to feelings of depression. Remember that it is not your families fault for your financial hardships and use this time to pull together and be strong.
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. If you choose Chapter 7, you are no longer responsible for joint debts. Although, your creditors may insist that the co-debtor pay off the entire debt.
Find the right time to take action. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. Talk with a bankruptcy attorney to find out the ideal timing for filing based on your particular situation.
File for bankruptcy before your finances get completely out of control. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Yet you can have debtors come after you and potentially take your home if you are not handling your debts properly. As soon as you stop denying that your debt is unmanageable, seek the advice of a good bankruptcy attorney.
Before you file bankruptcy, consider how you will pay off your debts. Bankruptcy rules generally outlaw repayment of creditors in the 90 days leading up to a bankruptcy filing, a period that is extended to one year when it comes to payments made to family members. Study applicable regulations prior to making any financial choices.
When you have decided that bankruptcy is the right route for you to take, you need to act relatively quickly. It can be difficult to admit you’re in need of help, but your debt will only grow larger if you put off your decision. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
After going through bankruptcy, a lot of people think they are being financially responsible if they shun all forms of credit. This is not a good decision on their part because credit cards help in building good credit. If you do not use credit, you will not rebuild the type of credit you will need in making future purchases. Begin with a credit card that has the very low limit and handle it extremely responsibly to begin healing your credit rating.
Choose a bankruptcy attorney carefully. Bankruptcy law seems to be a haven for new, inexperienced attorneys. It is important that the attorney you pick is experienced and has the proper licenses. Go online and look up the attorney’s record and read up on any reviews, as well as any pertinent background information.
While some new jobs are beginning to pop up, many people are struggling to find decent income; in fact, many people searching for any job. There are some things that can be done to prevent filing for personal bankruptcy even for those who have no steady income. Hopefully this article has provided you with some tips to keep yourself, or someone else, from having to file for bankruptcy. Also, try to remember that tomorrow provides you with a fresh start.
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