If you are faced with the threat of repossession of valuable assets, you may become terrified of the IRS. Consider your finances and put an end to creditor calls, by petitioning for personal bankruptcy. Keep reading to gain useful insight about navigating the process.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Generally speaking if you can discharge the tax, you can discharge the debt. It is pointless to use credit cards if they can be discharged.
If you can, get a word-of-mouth referral for a lawyer. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. It is necessary to be open regarding both the positive and negative aspects of your financial life. Do not hold back anything, and form a sound plan to make peace with your reality.
Your most important concern is to protect your home. Filing for bankruptcy does not mean you have to lose your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Remember to only file for bankruptcy if you need to. You might be better off consolidating your debt or availing yourself of some other remedy. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. It will certainly affect the credit rating that you have in the future. You have to make certain that you absolutely have no other choice.
Chapter 13
Find out more about Chapter 13. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $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. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Consider that if you even miss one payment, your case will not be considered by the court.
Make time to visit with family and friends during the bankruptcy process. Going through a bankruptcy can be an excruciating experience. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. A lot of folks decide to hide themselves from the world around them until the end of the process. Pulling away from people who care for you will not help the situation, and can cause your negative feelings to intensify. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
You may want to see if you can get lower payments on your vehicle if you want to keep it. Filing under Chapter 7 is usually a good way to lower your payments. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
It is important to understand your rights when you file for bankruptcy. It is not unusual for creditors to claim that their debt is not able to be discharged. Few debts exist that are not covered by bankruptcy, such as student loans or child support. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
While filing for bankruptcy protection can be a useful option, make sure you also investigate other alternatives. Also keep in mind that a lot of debt consolidation companies are scams that can make your debt worse. Keep in mind the tips from this article, so that you can make smart financial decisions and prevent debt in the future.
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