If you are thinking about filing for bankruptcy, research all your options before making an informed decision. Keep reading the ideas in the piece that follows in order to understand what you can expect and what ought to go into making such a major decision. Find out all the information you can before filing for bankruptcy.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. 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.
Rather than checking online, try to get recommendations from friends or family about a suitable bankruptcy attorney. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Consider other alternatives before filing for bankruptcy. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Unsecured Debt
Research Chapter 13 bankruptcy, and see if it might be right for you. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. This repayment period usually lasts from three to five years. If you make your payments faithfully during that time, any remaining unsecured debt will be eliminated. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
If you are earning enough to cover your bills, don’t file for bankruptcy. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
Think about all the choices available to you when you file for bankruptcy. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. For example, if you are in talks of foreclosure, you could use a modified loan to overcome your debt. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
Don’t forget to enjoy your life once your finances get fixed. After filing, many people find themselves stressing over their situation and how to fix it. Depression can ensue from the stress if action isn’t taken. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
Act when the time is right. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. In certain situations, you should file right away, but other situations will warrant you waiting. A lawyer is in the best position to evaluate your case and figure out when you should file for bankruptcy.
Do not wait until things go from bad to worse before filing bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. Yet you can have debtors come after you and potentially take your home if you are not handling your debts properly. As soon as you know that you are too far over your head, make the move to call an attorney skilled in bankruptcy court, to weigh your options.
Before you file, make sure you understand the laws as much as possible. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Avoid making payment that might interfere with your filing. Bankruptcy law may actually prevent you from repaying your credits for three months. Worse, if you’ve taken out a loan from your family, you can’t repay them for a whole year before filing. Find out more about legal requirements before making your decision.
Make a quick decision to be more responsible fiscally before filing. You must not doing anything that will raise your current level of indebtedness for several months before filing a bankruptcy petition. Determinations on whether to grant a bankruptcy are made after looking at your entire record; current history in addition to past issues. Even though you may have found yourself in a bind, you want to show them that you are trying to make serious efforts to stabilize your finances.
As the preceding article suggests, bankruptcy is not something that magically happens. Many steps have to be taken, and all of them must be performed properly. By using the above suggestions, you will be sure that all your Ts are crossed and all your Is are dotted when it comes to filing for bankruptcy.
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