When the IRS comes knocking at the door, it’s hard to tell what they’re going to take. Unfortunately, you may not have enough to give. This is where bankruptcy can help you out. Although filing bankruptcy can have a major effect on a person’s credit record, it may be the only viable option. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
When people owe more than what can pay, they have the option of filing for bankruptcy. If this is the case for you, you should begin to investigate the legislation in your state. Bankruptcy rules vary by jurisdiction. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Bear this in mind; if the tax can be discharged, then the debt can be as well. This means using a credit card is not necessary, when it will just be discharged.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Inaccurate or incomplete information can lead to your petition being denied. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Secured Card
You might experience trouble with getting unsecured credit after filing for bankruptcy. If this is so, apply for a secured card or two. You can exhibit your desire to rebuild your credit this way. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. Don’t hire an attorney who fails to address all your concerns and questions. After your consultation, take your time to make your decision. That gives you the chance to speak to a number of lawyers.
Be aware of recent changes, if any, in the bankruptcy code. These laws change regularly and you should stay up-to-date so you can make the best decisions. To learn about any changes, search the Internet or contact your state’s legislative office.
Think carefully about your different options before filing for bankruptcy. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7, for example, will wipe away every one of your outstanding debts. All the things that tie you to creditors will go away. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Safeguard your most valuable asset–your home. Filing for bankruptcy doesn’t automatically involve losing your home. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. Otherwise, try looking into house exemptions that may let you remain in the home if you meet certain financial threshold requirements.
Be sure you know what the difference between Chapter 13 and Chapter 7 bankruptcy is. Take the time to learn about them extensively, and then figure out which one will be best for your particular situation. If you’re really not sure how this all works after your research, meet with your lawyer and ask them prior to making a decision.
Remember to spend some quality time with your loved ones. The whole process of filing for bankruptcy is hard. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Many people decide to hide away from the world until the process is over. This is not recommended because you will only feel bad and this may cause you to feel depressed. Therefore, meet this challenge head on and surround yourself with caring family members so you can get through this difficult financial situation.
In conclusion, the option of bankruptcy is always there. Given that fact, it should be your last resort due to the consequences involved. As long as you’re properly informed about which moves to take and when, you should have little trouble navigating the process and ultimately restructuring your credit.
This is a limited-time offer. We are not able to guarantee availability if you wait!
