Debt is one of the scariest things to live with. One day you’re looking at a little mole hill; the next day you’re staring down a mountain. It doesn’t take long at all before the debt becomes too much to handle. Although it is a long and difficult process, there are ways to get through it unharmed and restore your finances. This article will help you decide if bankruptcy is the way to resolve your debt problems, and if it is, give you some tips for navigating the process.
Most people that file for bankruptcy owe a lot of money that they could not pay off. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. Each state has their own bankruptcy laws. You may find your home is safeguarded in one state, while in another it isn’t. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Dischargeable Debt
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Don’t be afraid to remind your attorney of certain details in your case. Don’t just assume that the attorney will remember it automatically. Do not hesitate to speak up; this is your hearing and your future is on the line.
Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. Keep up with your current state’s laws and regulations to figure out what steps you should take.
Chapter 7
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Under Chapter 7 type bankruptcy, all debts are forgiven. All creditor relationships will be severed. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Make sure your home is safe. Bankruptcy filings don’t necessarily have to end in the loss of your home. Depending on certain conditions, you may very well end up being able to keep your home. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Don’t hide from your friends and family while you go through bankruptcy. Going through bankruptcy is difficult. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. Lots of people choose to disappear for a while until the entire process is over and done with. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. Spend time with your family, talk about your problems and find things that relax you.
Financial Situation
When your financial situation starts to get really ugly, it can be easy to feel like you need help. The article you just read offered some helpful tips which you can use to get your financial situation in order when dealing with bankruptcy. It is time to take action and fix your problems.
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