Bankruptcy can be something that is difficult to live with. As you look at the hole you’ve dug yourself, you might think there is no escape. Yet even if your credit score is not good there are things you can do to still get the things you want, such as a car or home loan, read on to find out how.
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 places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. This makes using a credit care irrelevant, since bankruptcy will discharge it.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Don’t avoid telling your lawyer specific details with your case. Just because you have told him something of importance that he will remember it. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Unsecured Credit
After you have declared bankruptcy, you may have a hard time being approved for unsecured credit. Look into getting a secured credit card in order to get back on your feet with building credit. This will show people that you are serious about getting your credit record back in order. Unsecured credit may be offered to you quicker than you think after doing so.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. Don’t allow yourself to be taken advantage of by predatory lawyers just because you are filing for bankruptcy. It is important to find someone trustworthy.
If you are about to file for bankruptcy, then make sure you hire a lawyer. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Stay up to date with any new bankruptcy filing laws. This area of law is in constant flux and it is imperative that you know where the law stands at the time you file for your bankruptcy. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. In Chapter 7 most of your outstanding accounts will essentially be erased. All of your financial ties to the people you owe money to will disappear. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. By meeting with several attorneys through a free consultation you will be able to choose which attorney you feel more comfortable with.
Before filing a bankruptcy claim, make sure that your home is well protected. Bankruptcy filings don’t necessarily have to end in the loss of your home. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
If you are earning enough to cover your bills, don’t file for bankruptcy. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
After you have finished with the initial process of filing, you can relax and take a breather. After filing, many people find themselves stressing over their situation and how to fix it. It is essential to cope with this stress well, to prevent becoming depressed. After you have finished filing for personal bankruptcy, your life will improve.
Even if you have filed for bankruptcy you now realize that this does not limit you in life forever. When creditors can look at your credit report and see that you have made an effort, over time, to pay on time, getting credit will become easier again. Make the efforts to save and look at the impact it has when you attempt to make a home or car purchase.
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