When someone files for bankruptcy, it’s not a good thing. Bankruptcy can be ugly, embarrassing and a tough thing to talk about. Using the tips in this article, you can learn how to avoid bankruptcy and get your finances on the right track.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Remember that if you can discharge the tax you can discharge the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. If you find that to be the situation, consider requesting secured cards. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Look for a bankruptcy lawyer that comes from a personal recommendation instead of someone random on the Internet or in the yellow pages. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Before filing a bankruptcy claim, make sure that your home is well protected. Filing for bankruptcy will not always result in losing your home. You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
Chapter 13 Bankruptcy
Thing about filing a Chapter 13 bankruptcy. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. This lasts for three to five years and after this, your unsecured debt will be discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Make sure bankruptcy is truely your only option before filing. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. If foreclosure looms, think about getting your loan plan modified. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Talk to an attorney about reducing your car payments so that you can keep your vehicle. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. If you meet the criteria specific to your state, it may be a good option to consider.
Banish the word “shame” from your vocabulary before you file for bankruptcy. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. But, there is nothing positive about feeling this way and it can actually affect your mental state. Keep your mindset positive while you work through financial troubles such as bankruptcy to reduce stress and have an easier time coping.
Prior to filing, it is important that you know all about bankruptcy laws. For instance, a filer cannot transfer assets to someone else for at least a year before filing. Also, it is illegal to load up your credit cards with debt right before filing occurs.
Consider other options prior to filing for personal bankruptcy. One option to consider is credit counseling. You can easily find non-profits that can assist you in your debt struggles. They can work with those you owe money to in order to give you lower payments and lowered interest rates, too. You pay them and then they pay the creditors.
Clearly, bankruptcy does not need to be inevitable. By following the tips presented here, you can avoid filing for personal bankruptcy. Put this advice to work in your life so that you can avoid damaging your credit rating.
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