It can be hard to file bankruptcy. When you find yourself in a financial bind, you realize that your options are limited. Your credit score has been damaged and it can be difficult to get loan approvals. However, although difficult, it is not impossible to secure a loan.
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. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Prior to filing for bankruptcy, be sure you have investigated all of your alternatives. Look into other options, such as consumer credit counseling. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Do not use your retirement fund or savings to pay off creditors. Retirement accounts should never be accessed unless all other options have been exhausted. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
It is a good idea for you to hire a bankruptcy to handle your bankruptcy process. The topic of bankruptcy is a complicated one and it is important that you know all about it. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All creditor relationships will be severed. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Before you file for bankruptcy, make sure you absolutely need to. Consolidating current debt could make it easier to manage. There is not easy process associated with personal bankruptcy. It will affect your access to credit in the future. So, consider bankruptcy only as a last resort when you have no other choice.
Bankruptcy Filing
Do not file for bankruptcy if your income is greater than your bills. 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.
Don’t forget to enjoy your life once your finances get fixed. It is common for people to stress when filing. This stress could morph into clinical depression, if you fail to adequately address the problem. Life is going to get better once you get through this.
If you really want to keep your vehicle, speak with your lawyer about possible choices. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. If you meet the criteria specific to your state, it may be a good option to consider.
Bankruptcy is a difficult and stressful process, and you will need all the help you can get. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Do not solely use cost to determine whom to hire. It is not necessary to engage the lawyer who charges the highest fees; all you need is a lawyer of high quality. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. You might be able to view a court hearing. You might be able to watch how your prospective attorney handles the case.
You now must realize that filing bankruptcy with not limit your life forever. As long as you do what you need to do in order to get your credit back into shape, you can get back on top again. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.
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