No one thinks they will ever come face to face with bankruptcy. People can do their best to stay on top of finances, and when one or more financial emergencies come at them, they find that they have no choice but to look into bankruptcy. If you see yourself headed towards bankruptcy, the tips contained in the article below will be of great help to you.
Credit Card
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. It is possible to take advantage of other options, like consumer credit counseling. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
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. Retirement accounts should never be accessed unless all other options have been exhausted. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
It should go without saying, but refrain from lying in your bankruptcy filings. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications. Among these is the possibility that you could be blocked from ever filing again.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Comparing different lawyers makes it possible to find one with whom you work well.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. It is a little more difficult, though. Your trustee must approve any new loans such as this. You need to develop a budget and show that you will be able to afford the new payment. Also, be sure you can provide an explanation as to why this purchase is necessary.
It is in your best interest to be abreast of your rights in petitions for bankruptcy. Collectors may try to convince you that your debt can’t be discharged. Only a few kinds of debt, like student loans or child support, are ineligible for bankruptcy. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
Act when the time is right. When filing for personal bankruptcy, it is very important that you act at the correct time. Sometimes you should file immediately; however, there are times when it is better to delay until the worst has passed. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.
Bankruptcy Process
Before petitioning, you need to know what the personal bankruptcy rules are first. Without knowing the exact rules, you could inadvertently run into serious issues that could ultimately lead to your bankruptcy failing. It is even possible for your whole petition to be thrown out of court due to errors being made. Make sure you have a decent understanding of the bankruptcy process before you proceed. This will make the bankruptcy process much simpler.
Under no circumstances should you take out a huge cash advance on any of your open credit cards before filing for bankruptcy. Not only is this fraud, but you could end up having to pay back the money, even once you have filed for bankruptcy.
If you have found yourself facing bankruptcy, it is crucial that you get good advice on what to do next. The process is anything but simple, and information will become your best friend during this difficult time. Now that you have read the advice shared here with you, you can move forward on the right financial path for you.
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