Filing for bankruptcy can be a viable for anyone who has had their possessions repossessed by the IRS. Of course your credit will be hurt when you file for bankruptcy, but sometimes this is your best choice. You can find out more about filing for personal bankruptcy, as well as the consequences of this action, by reading the information presented here.
Credit Card
Don’t use a credit card to pay off your taxes before filing for bankruptcy. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. If the tax can be discharged, so can the 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 lawyer about important aspects of your case. Don’t assume that they’ll remember something important later without having a reminder. Don’t fear speaking up since it affects your case and future.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you fail to do so, things could get ugly.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Read up on the topic and familiarize yourself with the benefits and drawbacks of both variations. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
Personal Bankruptcy
Look into all of your options before you choose to file for bankruptcy. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. A plan that can be useful when foreclosure is looming is a loan modification. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. In many cases, Chapter 7 bankruptcy can lower your payments. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
Learn about the personal bankruptcy rules before petitioning. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. Some mistakes can even lead to your case being dismissed. Make sure you check into your case and see that you have the paperwork filled out correctly. Doing so will make the process a lot easier.
Consider all available options before deciding to file for personal bankruptcy. Credit counseling is an important option for you to pursue. There are a number of companies that will assist you, many of which are non-profit. They will make arrangements with your creditors so you will have lower payments as well as lower interest rates. You make payments to them and they pay your creditors.
If you know that you are about to file for bankruptcy, don’t exploit the information asymmetry and get huge cash advances on your credit cards. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
It is important to know that you may bet better off filing for bankruptcy than continuing to be in debt. Although filing for bankruptcy stays on your financial record for 10 years, you can immediately begin to improve your credit. One of the best benefits to bankruptcy is the promise of a fresh start.
A lot of people who file for bankruptcy swear they will never use credit of any kind ever again. The fallacy in this thinking is that credit is needed to improve your credit history again. If you do not use credit, you will not rebuild the type of credit you will need in making future purchases. Begin to go down the right path by obtaining a single card.
You should immediately vow to be more financially responsible before you actually file for bankruptcy. This includes borrowing money from friends, you want to create a clean slate when you file for bankruptcy. The courts and your creditors will be looking at your current, as well as past, credit history when adjudicating your bankruptcy. You should show them that your current spending behavior is being worked on by how you spend now.
You should obtain a copy of your credit report from all three reporting agencies soon after you declare bankruptcy. Be certain that the report is an accurate representation about your discharged debts and accounts for credit cards that are closed. If you find any discrepancies, immediately follow up on them so you can continue to repair your credit.
Chapter 7
You can either qualify for a Homestead Exemption to Chapter 7 or you should file for Chapter 13 to secure your home. There may be situations in which it makes more sense to convert a Chapter 7 case to a Chapter 13, but it is important to discuss such a strategy with your lawyer.
Finding out about your personal bankruptcy options is the difference between a successful and an unsuccessful claim. Just be sure that you do not use it as your first choice. Knowing the ins and outs of bankruptcy can make the filing process easier and make it less likely that you’ll have to forfeit your property.
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