Do not approach personal bankruptcy in a capricious manner. Therefore, it is very important to understand what you are doing when you file for bankruptcy. Read the tips listed here for guidance. Whenever you have a difficult decision to make, you can use information like what is in this article to make a smart choice.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Before you file for bankruptcy, carefully consider if it is the right option for you. Consider any other options that are available to you, such as 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.
Don’t hide assets or liabilities when filing for bankruptcy. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Chapter 7
You may have heard bankruptcy referred to differently, either as Chapter 7 or Chapter 13. Learn the differences between the two before filing. In Chapter 7 bankruptcy, your debts are all eliminated. All happenings with creditors will disappear. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. Take the time to learn more about these different options so you can make the best decision possible.
Before filing for bankruptcy ensure that the need is there. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy is not a simple, breezy course of action that should be taken lightly. Your future credit will be affected by these actions. You have to make certain that you absolutely have no other choice.
Unsecured Debt
Look into filing Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. The length of the plan is generally up to five years, and when this is over, you will be free of unsecured debt. Just know that missing one payment could cause your case to be dismissed.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. You must have bought the car 910 or more days before you filed, the loan must have a high interest rate, and you have to have a secure and steady working history in order for that to work.
There is a great amount of emotional and mental stress associated with filing for bankruptcy. Engage a competent lawyer in order to avoid excess stress and keep everything on track. Try not to pick a lawyer based on cost alone. Think about quality rather than cost when hiring an attorney. Speak with trusted people, check the BBB and take advantage of the free bankruptcy attorney consultations. You could also sneak into court to watch a real live bankruptcy proceeding to see how that attorney handles the situation.
As you have read in this article, there are many ways to file personal bankruptcy. Don’t stress about the amount of information before you. Take you time to figure out everything and keep these tips in mind. By doing so, you can make better choices in regards to bankruptcy.
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