It’s not fun to file bankruptcy. Bankruptcy can be a bad sign and can be embarrassing to tell others about in regards to your financial status. Use the tips in this article to learn how you can avoid bankruptcy.
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. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Retirement accounts should never be accessed unless all other options have been exhausted. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. The lawyer representing you when you file needs to have full knowledge of your financial situation. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Stay up to date with any new bankruptcy filing laws. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. To learn about any changes, search the Internet or contact your state’s legislative office.
Chapter 13 Bankruptcy
Consider filing for Chapter 13 bankruptcy. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Don’t hide from your friends and family while you go through bankruptcy. Undergoing bankruptcy can be a difficult experience. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. Most people adopt a very negative attitude toward bankruptcy. But, isolating yourself from others could bring out more depression. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.
Clearly, filing for personal bankruptcy is not your only option. The information contained in this article can help you to avoid having to file for bankruptcy. Start using what you learned today and see how much of a change you can make in your life, so that you do not have to harm your credit history.
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