Filing for personal bankruptcy is a serious decision. You need to know all the possible consequences of making this decision. Apply the advice within this article to have guidance in the proper direction. Research can surely help you even though you have tough decisions coming your way.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. The Bankruptcy Code has lists of various asset types that are exempt during the process. It is important to be aware of this list so you will know what assets are saved. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. These kinds of laws are constantly changing and it is important that you are aware of these changes, so that you can learn how to properly file for bankruptcy. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Do what you can to keep your home. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Check to see if you pass the requirements necessary to file for a homestead exemption.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. It’s a bit more difficult, though. You need to speak with your trustee so that you can be approved for a new loan. Draft a personal budget to show that you will be able to repay your new loan. You’ll also need a valid reason for making the purchase.
Forget about detrimental terms, such as shame, when you are filing for personal bankruptcy. Going through bankruptcy can cause you to lose a lot of self-esteem. These sorts of feelings are not helpful to you. Indeed, they may cause you mental anguish. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.
Be careful on how you pay your debts before you file a personal bankruptcy. Bankruptcy rules generally outlaw repayment of creditors in the 90 days leading up to a bankruptcy filing, a period that is extended to one year when it comes to payments made to family members. Do your research and figure out the laws for you.
Don’t wait when you’re thinking about filing for bankruptcy and have been for a while. It can be difficult to ask for help, but as you wait, you accrue more debt. The time to seek out professional advice on bankruptcy is as early as possible. Your financial situation will get complex very quickly, so wise counsel is more valuable the earlier you get it.
Know that ultimately, bankruptcy could get you a higher credit score than to keep making late payments or missing payments altogether. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. Getting a fresh start is one benefit of bankruptcy.
Credit Cards
Most people that file for bankruptcy try not to use credit cards again. In reality, though, credit cards can be a useful tool for people who are looking to rebuild their credit score after bankruptcy. If you don’t use credit at all, you will be unable to re-establish good credit necessary for cars, homes and other future purchases. Start by using just one credit card, and propel your credit in a positive direction.
Make wise decisions when choosing a lawyer. There are a large number of less than credible bankruptcy lawyers out there. Be sure your lawyer has years of experience and is licensed properly. The Internet can be helpful in investigating an attorney’s disciplinary record, client ratings, and background.
When you file for bankruptcy, you need to list every single debt that you want wiped out. If you posses debts that aren’t listed in the paperwork, they wont be included in your discharge. You must ensure that all essential data is recorded in order to guarantee that every debt is included in your discharge.
As you can see by now, there are different ways of filing for personal bankruptcy. Don’t become overwhelmed by the enormous amount of information available. Think carefully about your situation and the tips at hand. This makes it more likely that you will make rational decisions that will have long-term financial benefit.
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