Have you found yourself in a tight financial spot, and feel that bankruptcy is your only way out? Know you are not the only one. Many people have discovered that bankruptcy can help them escape their financial troubles. This article will give you the information you need to make your bankruptcy go smoothly.
Generally bankruptcy is filed when a person is facing insurmountable debt. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. Every state is different when it comes to dealing with bankruptcy. You may find your home is safeguarded in one state, while in another it isn’t. You should be familiar with the laws for your state before filing for bankruptcy.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Bear this in mind; if the tax can be discharged, then the debt can be as well. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Debt advisors are one of the many other avenues you can consider. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Avoid touching your retirement accounts whenever possible. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. The laws change a lot, so you need to look them up and have a better idea of how to properly approach the bankruptcy process. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
Before filing bankruptcy consider every available avenue. It may be that all you really need to do is consolidate some of your debts. Bankruptcy cases are long, anxiety-filled experiences. The future of your credit will be greatly affected. This is why you must ensure that bankruptcy is the only option left for you.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. It is a little more difficult, though. You need to speak with your trustee so that you can be approved for a new loan. You will need to make a budget and prove that you will be able to afford your new loan payments. Also, you need to be ready to say why you’re going to need the item.
Get the word “shame” out of your head when filing for bankruptcy. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Try not to give in to these feelings, as they are of no help to you and they can affect your emotional health. Staying positive and upbeat is the proper way to deal with bankruptcy.
Consider any other options available before filing for personal bankruptcy. Credit counseling is one option you should consider. There are many non-profit debt counseling services available. They will work with your creditors to get your payments lowered and your interest lowered as wll. You make payments to them and they pay your creditors.
As stated earlier, many people like you have found the need to file for bankruptcy. But with the benefit of the information you have here, you have a head start on your journey. Use the above tips to make sure the bankruptcy process goes smoothly.
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