Sadly, bankruptcy is an increasingly widespread phenomenon of late. You can thank the dismal economy for that. Before deciding to seek bankruptcy, you need to know the right information and what to expect; that way, you will make better decisions. This article will help you to make the best choices.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. The rule here is that if you can get the tax discharged then you can get the debt discharged. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Retirement Accounts
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Do not tap retirement accounts unless there is no other alternative. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. Not only is hiding income and assets wrong, it is also a crime.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Only choose an attorney once all your concerns are answered to your satisfaction. You need not decide right away. You can take your time and check out several attorneys before making your final selection.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. You could find relief from small debts by using a consumer credit counselor. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Take steps to ensure your home is protected. Bankruptcy doesn’t always mean you’ll lose your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Don’t file bankruptcy if you can afford to pay your debts. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Do not use credit cards for cash advances prior to filing a bankruptcy petition, as it can affect the dischargeability of the debt. If you were to do this you could be charged criminally with fraud, because the act is intended to rip off the company.
Bankruptcy Filing
Make sure to include all of the debts that you want eliminated on your bankruptcy filing papers. Any debts not included will not be discharged at your bankruptcy. It is up to you to verify that you’ve disclosed all debts so that you won’t end up paying off debts that may have been covered by the bankruptcy filing.
Some lawyers offer a free phone line so creditors may be referred there when they make attempts to contact you about your delinquent accounts. You can give all of your creditors this number so they can confirm that the account is included in a bankruptcy filing. Then, you won’t have to worry about any further harassing phone calls.
If you are unable to get a homestead exemption when filing for Chapter 7, you might consider filing for Chapter 13 bankruptcy to cover your mortgage. There are some times when your best option will be to change your case from a Chapter 7 filing to a Chapter 13 filing. Consult your attorney to see if this option is right for you.
When you go to find an attorney, seek those who have handled a large number of bankruptcy matters. There are lots of qualified attorneys from which to choose. The attorney you choose should have experience with bankruptcy cases. Don’t settle for the least expensive lawyer available.
There are others online who have had to file bankruptcy just like you, so seek them out and talk with them if you start feeling low over your situation. Going through bankruptcy is extremely stressful. This can cause you to feel isolated from other people. However, there are lots of people online who are going through what you are. You can ask these people for advice on how to deal with this adversity.
As said previously, bankruptcy is a popular topic due to the declining economy. Apply the tips from this article to make the best bankruptcy choices.
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