Is your financial situation bad and you think the only solution is bankruptcy? Don’t worry, you are not alone. There are thousands of people who file for bankruptcy every day. This article can help you make sure the process starts properly.
Do some research online about personal bankruptcy to get a better idea of what this procedure implies. The United States DoJ along with other private and nonprofit organizations all have insightful knowledge. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Should the tax be dischargeable, the debt is often dischargeable as well. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Credit History
Ask yourself if filing for bankruptcy is the right thing to do. You can also avail yourself of other options, such as consumer credit counseling. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.
Familiarize yourself with the bankruptcy code before you file. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. A qualified bankruptcy attorney is the best source for the latest information regarding the laws in your state.
Before you decide to declare bankruptcy, make sure that a less-drastic solution isn’t more appropriate. If your debt is relatively low, you may be able to manage it with credit counseling. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 7
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. All of your financial ties to the people you owe money to will disappear. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
Before filing for bankruptcy ensure that the need is there. Perhaps consolidating your existing debt can make it easier to manage. There is not easy process associated with personal bankruptcy. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Do not wait until things go from bad to worse before filing bankruptcy. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Being in debt can quickly put you into very deep hole and if you do not rectify the situation fast, you could face wage garnishment or even worse, foreclosure. The minute you realize that your debts are too big to take care of, contact a bankruptcy attorney to discuss your options.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Additionally, it is against the law for any filer to boost up the debt amount they carry on any credit cards just before filing.
Before you file make sure that you are not doing anything to bring yourself in debt any more. It is especially important to refrain from taking on any new debt before filing. Judges as well as creditors will consider you current and past history when they’re adjudicating personal bankruptcy. You need to show the court that you have changed and are ready to act in a financially responsible manner.
Filing a claim doesn’t always result in losing possessions. Personal property is exempt from bankruptcy claims. Some things you can keep include your clothing, furniture, jewelry and electronics. While this varies based on the laws in your area, your particular circumstances and the kind of bankruptcy you choose to go with, it may be possible to keep big-ticket items like your automobile or even your residence.
As you can probably see, you are not alone in needing to file for bankruptcy protection. But since reading this article, you now have information that others don’t have. Use the information here to help see you through a smooth bankruptcy.
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