Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Bankruptcy totally destroys your credit, but in many cases, people have no choice but to file. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
Credit History
Before filing for personal bankruptcy, make sure you are doing the right thing. You have other options available like consumer credit counselling services. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Investigate any new laws before deciding to file a bankruptcy. These kinds of laws are constantly changing and it is important that you are aware of these changes, so that you can learn how to properly file for bankruptcy. All of these changes will be addressed on the state’s legislative site. You can also contact them directly by phone or office visit.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Most bankruptcy lawyers offer a free consultation, so meet with several before you decide on one. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give legal advice. Hiring a lawyer could help you become comfortable with the legal things that you will encounter.
Always protect your house. Filing for bankruptcy doesn’t automatically involve losing your home. Depending on certain conditions, you may very well end up being able to keep your home. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
Chapter 13
Consider if Chapter 13 bankruptcy is an option. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. 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.
Don’t hide from your friends and family while you go through bankruptcy. Filing for bankruptcy, and all that comes with it, can be hard to handle at times. At the end of the process, many people are left with feelings of shame and worthlessness. It can be hard to face the world while the bankruptcy process is taking place. This is not recommended because you will only feel bad and this may cause you to feel depressed. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
If you make more money than what you owe, filing for bankruptcy is not a good option. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.
The introduction to this article made it clear that filing for bankruptcy is always on the table if you are chest-deep in debt. However, it has detrimental effects on your credit, so this should not be your first choice Knowing the ins and outs of bankruptcy can make the filing process easier and make it less likely that you’ll have to forfeit your property.
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