There are those who consider bankruptcy a situation for losers, but when it affects them personally, they change their tone. Sometimes bankruptcy becomes the only viable financial option thanks to uncontrollable circumstances, like a divorce or a layoff. If you find yourself in this situation, the below article will assist you.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. 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.
Be sure you’re doing what’s right before you file for bankruptcy. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Prior to filing for bankruptcy, discover which assets cannot be seized. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. You need to read the exemptions for your state, so you know what property you can protect. This will ensure that you do not have any surprises once you have filed bankruptcy.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Safeguard your home. Filing for bankruptcy does not always mean you will end up losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Research them online to see the positive and negative aspects of each one. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
It is imperative that you know for sure that bankruptcy is the option you need. It may be that all you really need to do is consolidate some of your debts. Bankruptcy cases are long, anxiety-filled experiences. It will have a major effect on your credit as time goes on. You have to make certain that you absolutely have no other choice.
Chapter 13
Find out more about Chapter 13. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Just know that missing one payment could cause your case to be dismissed.
Investigate other alternatives before resorting to bankruptcy. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. Loan modification plans can be helpful for those facing foreclosure. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
After you have filed for bankruptcy, enjoy your life. So many people become stressed when they file. That stress can lead to depression, if you don’t take the right steps in fighting it. Life will get better after you finally get this situation over with.
Speak with an attorney about any fears you have about losing your car. You may even be able to get your monthly payment reduced. Many times, payments can be lowered through Chapter 7 bankruptcy. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. However, there are steps which must be taken to ensure you are within the law of bankruptcy. Normally, the trustee assigned to your bankruptcy must approve any new loan. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Be decisive at the correct moment in time. Filing at the right time can make things go much more smoothly. There are situations in which it is in your best interest to file immediately, but other times it is advisable to wait. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
If you have tried everything you can think of to resolve your financial difficulties, filing for personal bankruptcy may be your only option. If something other than financial irresponsibility has caused your financial problems, there is no need to worry. This article will offer you some helpful information.
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