If you are overwhelmed by debt, it can be a very frightening experience. In severe cases, a small amount of debt can become overwhelming in a relatively short period of time. Once you realize you have to handle the problem, the real struggle begins. The following article will give you some pointers on what to do regarding bankruptcy if you are way over your head in debt.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The U.S. Some valuable resources include the U.S. Dept of Justice and American Bankruptcy Institute. The more you know, you can be confident you are choosing the right thing and that you are taking the right road to make sure your bankruptcy proceeds as easily as possible.
Tax Obligations
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Remember that if you can discharge the tax you can discharge the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
No matter what, don’t give up! If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Talk with an attorney who can guide you through the process of filing a petition.
Think carefully about your different options before filing for bankruptcy. One example would be that a consumer credit program for counseling if you have small debts. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Weigh all the information you can find on- and off-line to make an educated decision. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Chapter 13
Chapter 13 bankruptcy might be a good option, so don’t overlook it. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
Make sure bankruptcy is truely your only option before filing. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If a foreclosure is on your horizon, look into loan modification plans. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
After you have filed for bankruptcy, enjoy your life. It’s easy to be stressed during this time. Stress easily leads to depression, if you are not maintaining control of your emotions. After you have finished filing for personal bankruptcy, your life will improve.
When filing for bankruptcy, ensure you have listed all of your financial obligations. If you leave off even one tiny detail, you may end up in some serious trouble, but at the least your claim will be denied. It is better to have something on there that you are unsure about, rather than not include it at all and risk a dismissal. That may include secondary jobs, any cars or trucks you want to be considered assets and any current loans.
Some things in life are inevitable. Apply the advice from this article to help yourself better understand filing for bankruptcy. Use this information to make a fresh start!
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