There is no doubt that the current economy is a challenging one. People carry more debt and find it harder to stay fully employed when the economy is this bad. Many of these debts end up in bankruptcy filings, which just makes the problem worse. If you or someone you know is in jeopardy of going bankrupt, then read this article to figure out how to get out of this situation.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. When you are faced with this issue, begin to familiarize yourself with your state’s laws. The laws governing bankruptcy vary from state to state. Some states may protect you home, and some may not. It is important to understand the laws in your state before filing for bankruptcy.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Never give up. Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. 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 is able to assist you in the filing of your petition.
When a bankruptcy is imminent, retain a lawyer immediately. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
It is possible to keep your home. Filing for bankruptcy does not always mean you will end up losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Take the time to find out about each one online, and look at the advantages and disadvantages of each. 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.
Before filing bankruptcy consider every available avenue. Maybe you can just consolidate debt to make it simpler to deal with. Bankruptcy cases are long, anxiety-filled experiences. It will affect your access to credit in the future. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
If you can afford to pay your bills, bankruptcy is not a wise option. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Filing for bankruptcy should not be done on a whim. There are many other options including debt consolidation and making payment plans with your creditors. If foreclosure looms, think about getting your loan plan modified. 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. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
See if your attorney can help you lower your payments if you want to keep your vehicle. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
Although the economy is slowly picking up, there are still many people left without jobs and a decent wage. Even without steady income, there are things you can do to avoid bankruptcy. Hopefully these tips will help you. May good fortune be with you.
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