It can be challenging to face the prospect of bankruptcy. You realize how limited you are when it comes to a tight financial situation. But remember that there is always a way out of a situation you are in, so do not let bankruptcy scare you.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Bear this in mind; if the tax can be discharged, then the debt can be as well. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Debt advisors are one of the many other avenues you can consider. Bankruptcy will leave a permanent scar on your credit report and before you take this huge step, you should search through every available option first, to help try and limit the damage to your credit.
Before filling for bankruptcy, determine which assets will be exempted from seizure. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you aren’t aware of this, you could lose some assets that you value.
Do not despair, as it’s not the end of the world. Many times you can get repossess property back once bankruptcy has been filed. You may be able to get your property back if fewer than 90 days have passed between the repossession and are filing for bankruptcy. Consult with a lawyer who is able to assist you in the filing of your petition.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Make sure to get the most up-to-date information concerning the bankruptcy laws in your state. To learn about these changes, try contacting your state’s legislation office or checking their website.
Seek a less serious option prior to filing for bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Chapter 13 Bankruptcy
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 involves the elimination of all of your debt. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Be sure that bankruptcy really is your best option. You may be able to manager gets more easily by consolidating them. It can be quite stressful to undergo the lengthy process of filing for personal bankruptcy. It will have a major effect on your credit as time goes on. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Consider Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Being with the people who you love should be still be a top priority. The process of bankruptcy can prove particularly brutal. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. Many people decide to hide away from the world until the process is over. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
Filing for personal bankruptcy does not mean you are limited in you daily life. When you save your money and show lenders that you are making serious efforts to reestablish your credibility they look kindly at this. You will see just how big of a difference saving a little money can make when you go apply for your next home or car loan.