Bankruptcy definitely causes short-term stress, but if you’re responsible, it can be a relief in the long term. On one side, you will need to handle a lot of people looking into your personal finances. By contrast, once your bankruptcy is complete, you will have the freedom to rebuild your credit without being hounded by debt collectors. The following are some useful ideas for facilitating a smooth bankruptcy.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. A common rule is that dischargeable tax means dischargeable debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
When a bankruptcy is imminent, retain a lawyer immediately. The topic of bankruptcy is a complicated one and it is important that you know all about it. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
You can take steps to hang onto your house. It isn’t inevitable that you will lose your house when you file for bankruptcy. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. There are also homestead exemptions which, depending on your other finances, may allow to remain in your home.
When your income surpasses your bills, you should not be filing bankruptcy. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. Chapter 7 usually can help payments be lowered. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. There will, however, be obstacles. Your trustee must approve any new loans. Draw up a budget, demonstrating that you can afford the new loan payment. It will also be necessary to show why a new purchase needs to be made.
Make sure you are completely aware of bankruptcy laws before you consider filing. For example, it is forbidden for an individual to transfer any assets away from the name of the filer within the twelve months preceding filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Make sure you are aware of all your options before you file for bankruptcy. Credit counseling is an important option for you to pursue. A number of non-profit companies can assist you. They will work with your creditors to get your payments lowered and your interest lowered as wll. Payments are then made to the creditor via the counseling service.
Don’t take too long when trying to decide whether you want to file bankruptcy. Your debt will only continue to mount as you waiver on the decision, difficult as it might be. Speaking with a professional quickly will provide you with the advice you need before things spiral out of control.
If you feel that bankruptcy filing may be right for you, seek some legal advice first from a specialist lawyer. A reputable lawyer can explain the bankruptcy process and be your representative in court on your behalf. Your lawyer can also show you how to fill out the paperwork, file it properly and be there to answer any questions you may have.
It’s a good idea to contact the three major credit bureaus and get fresh copies of the credit reports they have on you once your bankruptcy is a few months behind you. Be sure to check your credit report for accuracy of closed accounts and discharged debts. Follow up on any discrepancies right away, so that you can begin repairing your credit.
When you file for bankruptcy, you need to list every single debt that you want wiped out. Debts that you neglect to include in your paperwork won’t be discharged. It’s your duty to be sure you have everything written down that is important because some debts that could have been discharged may be missed.
When it comes to filing for personal bankruptcy, there are good things and bad things. Never forget that being well-informed is always the key to a successful bankruptcy, no matter what your reasons for filing are. The tips laid out here will help you cope with bankruptcy in an easier manner. Incorporate these tips into the process and watch how much better you feel.
This is a limited-time offer. We are not able to guarantee availability if you wait!
