Filing for bankruptcy can be a complicated process. There are different types of bankruptcy, and the type that you choose depends upon your personal finances and the nature of your debts. Prior to filing, there is a lot you need to know. The following article contains valuable information to help you make that decision.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The United States DOJ, the NACBA, and the ABI all have useful information. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. 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.
Always be honest and forthright when it comes to your bankruptcy petition. Not only is hiding income and assets wrong, it is also a crime.
Secured Card
It can be difficult to obtain unsecured credit once you have filed for bankruptcy. If you are in this situation, applying for a secured card may be the answer. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Be sure to weigh all of your options before deciding to file for personal bankruptcy. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Meet with a few attorneys who offer free consultations before hiring one. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Look for a lawyer who you can relate to.
Your most important concern is to protect your home. You don’t have to lose your home just because you are filing for bankruptcy. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Unsecured Debt
Consider filing for Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Before proceeding with your bankruptcy, it’s a good idea to start spending ample time with the people you care about most. The process of bankruptcy can seem brutal. It is long, hard and sometimes leaves people feeling guilty or ashamed. Many people don’t feel like socializing during the ordeal. Self-imposed isolation can make you feel worse about it and can cause depression. So, even though you may be ashamed of the situation you are in, you should still be around those you love.
Review bankruptcy rules before you file your petition. You want to understand what is going to happen when you file for your specific case. You might find that your case become dismissed because of a mistake. Make sure you check into your case and see that you have the paperwork filled out correctly. This will make the process go as smoothly as possible.
Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. Not only is this fraud, but you could still be liable to repay the money at the end of the day.
When you have decided that bankruptcy is the right route for you to take, you need to act relatively quickly. While it may be difficult to accept that you are in trouble, waiting only prolongs the agony. By speaking with a professional in a timely manner, you can get good advice before the bankruptcy process gets too difficult.
Understand that in the long run, a bankruptcy filing may be better than continued missed paymsent when it comes to your credit score. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. A major benefit of the bankruptcy process is the ability to essentially start over.
Although it is tempting to toss out the idea of ever owning credit cards again, think again. This isn’t wise since you need to use credit to build credit. If you never work on rebuilding your credit after a bankruptcy, you may not be able to qualify for a car loan or mortgage. Start with one single credit card, and rebuild your credit once more.
As you now know, bankruptcy is not a decision that should be made lightly. If you feel that bankruptcy best suits your current financial position, then ensure you retain an experienced attorney who can help you.
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