Nowadays, the economy is not in very good shape. The difficult economic circumstances have caused increasing levels of unemployment and personal debt. Debts can often lead to bankruptcy, an outcome nobody ever wants. The following article will help you, or your loved ones, gain control of your financial situation and hopefully prevent bankruptcy.
Local Bankruptcy
Millions of Americans file for bankruptcy each year because they can not pay their bills. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Every state has a separate law having to do with bankruptcy. In some states, your home is protected, while in others it is not. Become acquainted with local bankruptcy laws before filing.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Should the tax be dischargeable, the debt is often dischargeable as well. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Exhaust every other option before making the decision to file for personal bankruptcy. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
You might experience trouble with getting unsecured credit after filing for bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. In time, it may be possible for you to obtain unsecured cards.
Before declaring bankruptcy, ensure that all other options have been considered. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. This type of bankruptcy ends any relationship you might have with creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
If your vehicle is in question, perhaps your attorney can assist in lowering your payments. Many times, payments can be lowered through Chapter 7 bankruptcy. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.
Pick the right time to file. Timing is important, and that is especially true when filing for bankruptcy. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.
Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. Do not let these negative feelings influence your decision. Remembering to stay positive as you go through financial difficulties is a great way to deal with your bankruptcy filing.
Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Failing to list these could cause the dismissal or delay of your bankruptcy petition. No matter how insignificant a sum seems, include it in the documentation. This financial information may include income from side jobs, vehicles you own and loans you have not paid off.
Even the economy is gradually getting better, many people still do not have a job. Even long-term job loss does not inevitably have to result in bankruptcy. This article has likely given you some ideas on how you can protect yourself from having to file for bankruptcy. Hopefully, you have the best luck.
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