Bankruptcy can be tough. Your financial options become very limited. But, even those with damaged credit histories have options when it comes to securing homes and vehicles, as the following article explains.
Credit Cards
Do not use a credit card to pay income taxes and then 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. The rule here is that if you can get the tax discharged then you can get the debt discharged. It is pointless to use credit cards if they can be discharged.
Do not abandon hope. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. If the property you own has been repossessed under 90 days before the bankruptcy filing, you may still be able to get it back. Consult with a lawyer who can advise you on what you need to do to file a petition.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Choose an attorney who is experienced, educated and well-versed in bankruptcy laws. It is not necessary to come to a decision immediately following the meeting. You can take your time and check out several attorneys before making your final selection.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Protect your house. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, contingent on certain factors, such as your home decreasing in value or having a second mortgage. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Consider Chapter 13 bankruptcy for your filing. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. However, if you were to miss a payment, the court would dismiss your case right away.
Be around family as much as possible. Undergoing bankruptcy can be a difficult experience. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. Most people adopt a very negative attitude toward bankruptcy. However, this isolation will just make you feel worse, and it could cause you to be depressed. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Filing for personal bankruptcy does not mean you are limited in you daily life. If you don’t spend frivolously and repay lenders faithfully, lenders will be more willing to lend to you in the future. 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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