Just thinking about bankruptcy is a scary thought for many people. From fears of growing debt to worrying that they’ll no longer be able to provide for their families, people have good reasons to be scared. The following advice will greatly help you if bankruptcy is a fear of yours.
Credit Cards
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Ask yourself if filing for bankruptcy is the right thing to do. You have better options. For example, you could try credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Keep with what you have decided to do. There may still be way to get repossessed items back after you file for bankruptcy. If the repossession occurred within 90 days from your filing date, it is possible that some of your property can be returned to you. Consult with a lawyer that can walk you through the filing process.
State Legislature
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. Review the state legislature web site or contact the state legislature office to keep abreast of changes in the law.
Do what you can to keep your home. Filing for bankruptcy will not always result in losing your home. There are mitigating factors, such as lose of value, or multiple mortgages. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Don’t be tempted to race toward a bankruptcy without taking time to make sure it is the right thing for you to do. Consider whether debt consolidation may be a more viable alternative. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will have a major effect on your credit as time goes on. So, consider bankruptcy only as a last resort when you have no other choice.
While going through this process, spend more time with friends and family. Going through bankruptcy is a lot of stress. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. It is not uncommon for a person to feel the need to pull away from loved ones during the process. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial 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 are making more money than you owe, bankruptcy should not even be an option. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
If keeping your vehicle is of great concern, ask your lawyer if you can secure a payment modification. Chapter 7 bankruptcy is one of the most common and effective. But, your car has to have been bought at least 910 days before you file. Also, it must come from a high interest loan and you have to have been consistently working.
Get the word “shame” out of your head when filing for bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. But, there is nothing positive about feeling this way and it can actually affect your mental state. Keep a positive state of mind to deal with your tough financial situation.
Don’t take big cash advances off your credit cards in the days prior to filing for bankruptcy. This will be viewed as fraud, and you may be held responsible for the balances despite your bankruptcy filing.
Credit History
Before filing for bankruptcy, it is important to still be smart with your finances. Be certain not to incur extra debt or increase the amount of debt you already have. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. Your present handling of your finances will show that you are doing your best to change bad habits.
Be certain to create a list that displays all the debts you want discharged when you file. Anything not specifically listed on the filing will be excluded in the final bankruptcy. It’s your duty to be sure you have everything written down that is important because some debts that could have been discharged may be missed.
Filing for bankruptcy can be a very scary and intimidating experience. You might have been somewhat afraid of it, but today you no longer need to, thanks to the information this article. Apply what you’ve learned here, and get a fresh start for you and your family.
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