A lot of people see bankruptcy in a negative way, but it is really a good solution in certain situations. Situations like a job loss or a divorce can bring you to a situation where the only solution is bankruptcy. If filing for bankruptcy is your only choice, educate yourself on the process.
Credit Card
Do not use a credit card to pay income taxes and then file for bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. This means using a credit card is not necessary, when it will just be discharged.
After filing for bankruptcy, you could have trouble acquiring unsecured credit. If you find yourself in this situation, you may want to think about getting a secured card or two. If you pay what you owe back promptly at all times, you can show that you are taking steps to be responsible about your payments and credit rating. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you fail to do so, things could get ugly.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. Most attorneys offer free consultations, so meet with a number of them before you retain one. Make your decision after all of your questions have been answered. It’s isn’t necessary to make a choice right away. You can take your time and check out several attorneys before making your final selection.
Seek a less serious option prior to filing for 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. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Before you file for bankruptcy, make sure you absolutely need to. Maybe you can just consolidate debt to make it simpler to deal with. Bankruptcy is a long process that can be stressful. It will certainly affect the credit rating that you have in the future. Because of this, filing for bankruptcy should only be used as a last resort.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. Before filing, talk with an attorney who can help you weigh all of your options. Various loan plans out there can be a lifesaver if you’re facing a 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. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
After considering all of your options, you may find that bankruptcy is your only choice. Don’t carry the weight of the world on your shoulders. If the circumstances that brought you here were not within your ability to control, let go of the stress and guilt associated with them. You will see treasured information in the article that follows.
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