Do not approach personal bankruptcy in a capricious manner. There are many factors involved in the bankruptcy process and it is crucial that you understand them. Use what you learn here to guide you towards making the right decisions regarding personal bankruptcy. Research will help you deal with the tough decisions you need to make.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Once you file for bankruptcy, you will have a hard time getting loans or credits. If you are in this situation, applying for a secured card may be the answer. This demonstrates to creditors that you are making a good faith effort to repair your credit. In time, it may be possible for you to obtain unsecured cards.
Hire a lawyer if you plan on filing for bankruptcy. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. Your lawyer will make sure that the filings are correct and help you navigate the complex process of filing for bankruptcy.
Weigh all of your options before declaring bankruptcy. You could find relief from small debts by using a consumer credit counselor. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
If your vehicle is in question, perhaps your attorney can assist in lowering your payments. Lower payments can sometimes be structured into a Chapter 7 solution. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Chapter 7
Take into consideration all the ramifications of a Chapter 7 bankruptcy. Filing for this can impact any co-debtors, such as friends or family. Once you have filed Chapter 7, you, by law, are not responsible for any of your debts that also include your co-debtor. However, the creditors could come after your co-signer and demand full payment for the debt.
When you do file for bankruptcy, make sure you know your rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. Few debts exist that are not covered by bankruptcy, such as student loans or child support. If a collector tells you your debt won’t be discharged in your bankruptcy and you know that it will, report the collector to the attorney general’s office in your state.
Act when the time is right. Filling for bankruptcy can be a matter of correctly assessing the right time to begin. Sometimes you may want to wait to file and in other situations you may find it better to do it as soon as you can. The professional advice of a bankruptcy lawyer can help you pin down the best time to file given your current financial state.
If you are thinking about filing for bankruptcy, one of the first things you should do is look into the laws of your state. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. Additionally, it is against the law for any filer to boost up the debt amount they carry on any credit cards just before filing.
As you’ve read, you can file bankruptcy several ways. Don’t be overwhelmed by the vast amount of information available. Take some deep breaths, and think about what you’ve just learned. Then you will be prepared to make informed decisions about bankruptcy and your financial future.
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