It’s hard to make the decision of filing for personal bankruptcy; however, sometimes there’s no choice. It is always best to go forward, armed with the best information and assistance you can find. You need to know what you are up against. Continue reading for good advice from others that have filed for bankruptcy themselves.
Credit Cards
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Most lawyers offer free consultations, so consult with a few before settling on one. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You do not need to make a decision immediately after the consult. Consulting with several attorneys will also help you find someone you trust.
Hire a lawyer if you plan on filing for bankruptcy. With all the ins and outs of bankruptcies, it can be hard to grasp all the knowledge. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Before you file for bankruptcy, make sure you absolutely need to. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy cases are long, anxiety-filled experiences. It will affect your access to credit in the future. Therefore, before you file for bankruptcy you need to consider all of your alternatives.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. A Chapter 7 bankruptcy will relieve you of your legal responsibility to pay any joint debts. Your creditors can then come after your co-debtor for full repayment of the debt.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. However, there are steps which must be taken to ensure you are within the law of bankruptcy. You need to contact your trustee so you can get 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. You should also be prepared to explain why you need to purchase the item.
Declaring bankruptcy is not something most people aspire to, but can be unavoidable. If you read through the information above, you’ve gathered a little bit of insight provided by other people who have had to deal with bankruptcy. Gleaning insight from others who already walked the same path can minimize complications and help to reduce your own stress at a difficult time.
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