Just thinking about bankruptcy can make people fearful. Ever increasing debt, along with the difficulty of supporting a family is very frightening for some people. If you’re afraid of this scenario (or worse if you are living at), it is our sincere hope that the advice given here will be of help to you.
One of the best ways to learn more about the bankruptcy process is to hit the Internet and look up reputable bankruptcy websites. The U.S. Department of Justice, American Bankruptcy Institute, along with many other websites can provide you with the information you need. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
Credit Card
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. The rule here is that if you can get the tax discharged then you can get the debt discharged. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Ask yourself if filing for bankruptcy is the right thing to do. Debt advisors are one of the many other avenues you can consider. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. Without reading the list, you may be shocked at which possessions can be taken from you.
Never give up. When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. You may be able to recover repossessed property if the repossession occurred fewer than 90 days ago. Speak to a lawyer who will be able to help you file the necessary paperwork.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. If your debt is relatively low, you may be able to manage it with credit counseling. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Safeguard your home. You do not have to lose your home in the process of a bankruptcy. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Remember to only file for bankruptcy if you need to. You may well be able to regain control over your debts by consolidating them. Filling for bankruptcy could be a long and stressful process. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. Because of this, filing for bankruptcy should only be used as a last resort.
Chapter 13
You could see about filing for Chapter 13 personal bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Keep in mind that missed payments will trigger dismissal of your case.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Although bankruptcy may feel like a simple method of getting out of your large debt, it leaves a permanent mark on your credit history for up to 10 years.
Because of the comes from bankruptcy, you may feel overwhelmed and stressed. Look for a good attorney who can help you through the process. Don’t hire based solely on cost. Your lawyer does not necessarily have to be the most expensive one; however, you should be certain of his or her qualifications and abilities. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. You might want to visit a court hearing and observe lawyers handling their cases.
If you’re continuously making delinquent payments and are constantly missing payments, filing for bankruptcy might just be a kinder, gentler solution for you. Yes, the bankruptcy will stick around for a whole ten years, but the clean slate you get from filing will help you get back on the right track quickly. The whole point of bankruptcy is to give you a second chance.
It is not unusual for people to be worried about bankruptcy; the process is nerve-wracking. That said, the best antidote to fear is information, and this article has given you that in spades. Take this advice to heart, and do everything possible to improve your situation.
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