These days, the word “bankruptcy” is about as common as the word “the.” There are many who recognize the role the economy has played in this epidemic. If you decide to file, it’s crucial that you are well educated on the subject of personal bankruptcy, so you are able to make proper choices. This article is going to give you that knowledge.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Ask yourself if filing for bankruptcy is the right thing to do. You have other options, including consumer credit counseling help. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Don’t file for bankruptcy until your represented by an attorney. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. A personal bankruptcy lawyer will be able to help you and ensure you are doing things the proper way.
Be aware of recent changes, if any, in the bankruptcy code. If you want to file for bankruptcy successfully, it’s important to review the latest applicable laws. They tend to change frequently. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. 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. Interviewing multiple attorneys is a good way to find the best fit.
Unsecured Debt
If you are going to be filing for bankruptcy, think about filing Chapter 13. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
Look into all of your options before you choose to file for bankruptcy. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If a foreclosure is on your horizon, look into loan modification plans. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Once your initial filing is complete, it is time to take some time to relax a little. Filing for personal bankruptcy can be very stressful for the debtor. That stress could lead to complete depression, if you do not take the necessary steps to fight it. Your life will see improvement after you get past the bankruptcy.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. This is a lot harder. You will be required to meet a trustee and be approved for a new loan. Create a budget and prove that you will be able to afford it. You also need to be prepared to answer questions about your need for the new item.
Make sure you act at an appropriate time. When filing for personal bankruptcy, it is very important that you act at the correct time. Sometimes, filing as soon as you can is best, while other times, it is wise to get past the worst problems first. Speak with a lawyer specializing in bankruptcy in order to learn when you should file your petition.
Be sure you know the bankruptcy laws before you think about filing. Here is one example, an individual who files for bankruptcy cannot transfer any assets for a year before the filing date. Also, the filer can not increase their debt before filing.
Gain an understanding of bankruptcy law before you file. If you do not file for bankruptcy properly, you might run into a lot of different issues. It is even possible for your whole petition to be thrown out of court due to errors being made. Do the proper research on bankruptcy before taking the next step. Doing this will make the process easier.
As this article stated, the subject of bankruptcy is on many people’s minds nowadays, due to the economy. By using the information you’ve read here, you can now make sound decisions about your finances and choose the bankruptcy option that will work best for you.
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