Personal bankruptcy is always an option for those who have had possessions, such as vehicles, repossessed by the Internal Revenue Service. Bankruptcy can play havoc with your credit, but is often unavoidable. The article below discusses some of the pros and cons of filing bankruptcy.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. There are plenty of other options open to you, like consumer credit counseling. 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.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Personal Bankruptcy
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Make sure you know what each entails so you can make the right choice. If Chapter 7 is what you file, your debts will get eliminated entirely. Any debts that you owe to creditors will be wiped clean. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Consider if Chapter 13 bankruptcy is an option. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Talk to an attorney about reducing your car payments so that you can keep your vehicle. Filing under Chapter 7 is usually a good way to lower your payments. 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.
Going through bankruptcy is tough and can be mentally and emotionally draining. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Try not to pick a lawyer based on cost alone. There is no need to use an expensive attorney. The important thing that you must do is to get a good attorney. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. Try to get a referral from a trusted friend or family member.
Make a comprehensive list of all of your financial information before you file for bankruptcy. Failing to list these could cause the dismissal or delay of your bankruptcy petition. Make sure that you add very small sums, even if you believe that they aren’t important. Anything, like a job on the side, assets, like cars, and any outstanding loans should be included.
It is important to understand that a bankruptcy more beneficial to your credit than multiple overdue or missed payments on debt. Bankruptcy can be seen on your credit history for 10 years, but you can begin repairing the damage immediately. A major benefit of the bankruptcy process is the ability to essentially start over.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. However, this is not a good idea because it is desirable to heal your credit rating. If you aren’t using any credit, then it will be very difficult to get your credit score high enough to be able to purchase things like a car or home in the future. You just have to realize that proper planning is going to have to take place and that you are going to have to start back up one step at a time.
It is important to consult with an attorney who specializes in bankruptcy if you are headed toward bankruptcy. A specialized lawyer will advise you on what to do and help you out if you run into any issues when filing for bankruptcy. The lawyer you chose can take you through the paperwork step-by-step and resolve any questions about the process.
As you can see by now, you do have the option of filing bankruptcy. Just be sure that you do not use it as your first choice. Knowing how to best go through the bankruptcy process can reduce one’s troubles in the long run and make it easier to retain one’s possessions.
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