Losing some of your valuable possessions, such as jewelry or vehicles, can make you very fearful. When your debt situation gets serious enough, you may want to consider personal bankruptcy as a way to save yourself. Keep reading for tips that will help you navigate the process successfully.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” This means using a credit card is not necessary, when it will just be discharged.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Unless there are no other options, your retirement funds should never be touched. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Do not hesitate to remind your lawyer of any details regarding your case. Just because you have told him something of importance that he will remember it. Speak up if something is troubling you, as this is your future we are talking about here.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. When you arrive at a consultation ask plenty of questions. You should also seek free consultations from several attorneys prior to choosing one. Choose to file only if your lawyer has convinced you that this is the best decision. You need not decide right away. This allows you time to speak with numerous lawyers.
Debt Repayment
Make sure bankruptcy is truely your only option before filing. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If you are about to lose your house, talk to your lender about a loan modification. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
Do not omit any information about your finances, assets or debts when filling out your bankruptcy paperwork. Omissions or errors may cause your case to take more time to resolve, or even be rejected entirely. No matter how insignificant a sum seems, include it in the documentation. This may include secondary employments, vehicles you own and loans you still owe money on.
As you are heading towards a bankruptcy filing, don’t be tempted to run up cash advances on your credit cards in the belief they will be erased in the legal proceedings. This is considered fraud, and even after bankruptcy you can be forced to pay all of that money back to the credit card company.
Be cautious if you are planning to pay off any of your debts before you file for bankruptcy. The laws regarding bankruptcy most often prevent you from paying back some creditors for up to 90 days before filing, and friends and family for up to one year. So, before you ultimately decide to file a claim, be sure that you understand the rules in place.
If you’re thinking about filing bankruptcy, also think about hiring a lawyer. The complexities of the process of filing, court proceedings and other issues can best be handled by a competent lawyer. Your attorney will be able to answer any questions you may have and will fill out the appropriate forms to file bankruptcy.
Do a check of your credit report from all the top companies who report on consumer credit after two or three months have passed following your bankruptcy. Remember that this report would be representing your closed credit accounts and your discharged debts. Address any mistakes or issues that you find so you can be on your way to better credit.
If you start a new or second job, that doesn’t mean you should stop filing for bankruptcy! Filing for bankruptcy may still be the best way forward for you. Filing alters your life dramatically. If you file before the new employment commences, your repayment options will be considered without this new wage figure being taken into consideration.
Make sure all your debts are included in the discharge so you can avoid filing unnecessarily. Debts like student loans always remain on your report even if you file. Instead, credit repair agencies or a loan consolidation service should be used for reducing debt.
Remember to check for accuracy. Even though you might have a lawyer fill out your paperwork and file it, you are personally responsible for making certain that all information within the documents are accurate. Bear in mind that a lawyer deals with many cases and there is always a chance of a screw up. That is why you must stay on top of every piece of your paperwork, and make sure it is done correctly.
Although bankruptcy is an available option, it is best you look for alternative solutions first. Keep in mind that a number of debt consolidation services aren’t legit, and will only worsen your debt. Keep the tips here in mind as you navigate through your financial challenges, and prepare yourself for a more successful financial future.
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