Personal bankruptcy can always be an option for people that have had items, like vehicles, repossessed by the IRS. Of course your credit will be hurt when you file for bankruptcy, but sometimes this is your best choice. Pay attention to what this article is teaching you about bankruptcies and their pitfalls.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Bear this in mind; if the tax can be discharged, then the debt can be as well. It is pointless to use credit cards if they can be discharged.
Make sure you keep reminding your attorney about any important details in your case. Don’t assume that they’ll remember something important later without having a reminder. This is your bankruptcy and your future, so never be nervous about speaking your mind.
Once you file for bankruptcy, you will have a hard time getting loans or credits. Look into getting a secured credit card in order to get back on your feet with building credit. This will show other people that you’re serious when it comes to having your credit record in order. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Keep at it! If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If you have property repossessed less than ninety days prior to filing your bankruptcy, you may be able to get it back. Consult with a lawyer that can walk you through the filing process.
When a bankruptcy is imminent, retain a lawyer immediately. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
It is important to know how Chapter 7 filings differ from Chapter 13 filings. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Chapter 13
Consider filing a Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
If you can afford to pay your bills, bankruptcy is not a wise option. 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.
Chapter 7
Keep in mind that filing for Chapter 7 bankruptcy may affect other people than just you, including family members, and in some cases, business associates. You may have your responsibility for your portion of the loan discharged under Chapter 7. However, creditors can demand co-debtors pay the amount in full.
Banish the word “shame” from your vocabulary before you file for bankruptcy. Often, with bankruptcy, come feelings of guilt, shame and worthlessness. These feelings can cause you to make rash decisions and cause psychological problems. To best deal with filing for bankruptcy, look for the positives in the situation.
There is a great amount of emotional and mental stress associated with filing for bankruptcy. The best way to lessen this stress is to employ a lawyer, who can handle most of it for you. Don’t think that the highest priced attorney is the best. There is no need to use an expensive attorney. The important thing that you must do is to get a good attorney. Make sure people who have experienced bankruptcy give your referrals. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
The introduction to this article made it clear that filing for bankruptcy is always on the table if you are chest-deep in debt. However, you may wish to avoid it because of what it can do to your credit. The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.
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