You might fear the IRS because they could seize assets, such as your car. Put a stop to harassment by creditors and blaze a trail to a new financial future by declaring bankruptcy. To make your way through filing for bankruptcy smoothly, follow the tips presented in this article.
When people owe more than what can pay, they have the option of filing for bankruptcy. If this describes your situation, it makes sense to become familiar with relevant laws. Laws differ from one state to the other. Some states may protect you home, and some may not. Be sure you educate yourself on local laws prior to filing.
Be sure everything is clear to you about personal bankruptcy via looking at websites on the subject. The United States DOJ, along with a number of other bankruptcy institutes and attorneys specializing in bankruptcy can give you invaluable information. As with everything in life, the more you know about filing a claim, the better off you’ll be. You can properly prepare when you know what you’re preparing for.
Dischargeable Debt
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Before undertaking the bankruptcy process, ensure you have made the correct decision. There are plenty of other options open to you, like consumer credit counseling. 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.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. Do not try to shield some assets or income from your creditors. This can get you in serious trouble and prevent your bankruptcy petition altogether.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Speak to a lawyer who will be able to help you file the necessary paperwork.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Make sure your home is safe. You do not have to lose your home in the process of a bankruptcy. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you may end up keeping it. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Don’t file for bankruptcy unless it’s absolutely necessary. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. It will have a major effect on your credit as time goes on. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13 Bankruptcy
Find out more about Chapter 13. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. However, if you were to miss a payment, the court would dismiss your case right away.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. Loan modification plans can help if you are dealing with foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. It is a little more difficult, though. Normally, the trustee assigned to your bankruptcy must approve any new loan. You will need to come up with a budget and show that this new loan payment schedule is doable. Be ready to justify the purchase that you need the loan for, too.
Be cautious if you are planning to pay off any of your debts before you file for bankruptcy. Some bankruptcy rules do not allow you to send money to creditors within three months of filing; this can extend up to a full year if a loved one is involved. Know the laws prior to deciding what you are going to do.
Even though bankruptcy is always a personal choice, do not file without checking out all other options. Avoid debt consolidation services and credit counseling services that seem too good to be true. Keep the advice from this article in mind in order to make ideal financial decisions and stay away from debt.
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