Bankruptcy can be both a relief and a stressful situation. You do have to sort through all of your finances and interact with a lot of people in the financial part of your life. Bankruptcy has a positive outcome since the collection calls will stop. Here are some great tips for making bankruptcy easier.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Retirement Accounts
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Retirement accounts should never be accessed unless all other options have been exhausted. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Do not give up. Filing for personal bankruptcy may possibly enable you to reclaim your personal property that have been repossessed, like your car, electronics and jewelry items. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Speak with a lawyer that will provide you with guidance for the entire thing.
See if there is an alternative you can use before declaring bankruptcy. Those with smaller debts may find use in a program for consumer credit counseling. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Looking for an attorney will help you find a lawyer you feel good around.
Safeguard your home. You don’t have to lose your home just because you are filing for bankruptcy. There are mitigating factors, such as lose of value, or multiple mortgages. If you’re not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know.
Filing for bankruptcy is not recommended when you have income more than your debts. Although you may see bankruptcy as a free pass to eliminate your debt, if you can slowly whittle away at your debt with your income, it will be much better than killing your credit score with a bankruptcy filing.
When you do file for bankruptcy, make sure you know your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. There are few debts that can’t be discharged. If a collector uses this tactic about debt that can, in fact, be discharged through bankruptcy, report the collection agency to the attorney general’s office in your state.
Do not think of filing for personal bankruptcy as a shameful thing. The bankruptcy process makes people feel guilty and ashamed. These sorts of feelings are not helpful to you. Indeed, they may cause you mental anguish. Try to keep a positive attitude during this tough time and you will be able to better cope with bankruptcy.
If you are going to file for bankruptcy make sure you are prompt. Some people just ignore the trouble they are in financially and think it will go away later. This is not a good decision. Debt could become uncontrollable and by not dealing with them properly, your wages could be garnished or you may find your home in foreclosure. Once you realize that the debt you have is too much for you to handle, start thinking about talking to a bankruptcy attorney, they can guide you throughout the entire process.
Do your homework so you thoroughly understand the laws pertaining to bankruptcy before you file. You should not transfer your assets to anyone in the year preceding your bankruptcy filing. Moreover, a filer is prohibited from spending or incurring extra debt prior to their bankruptcy filing.
When filing for bankruptcy, ensure you have listed all of your financial obligations. You can delay your bankruptcy process if you do not add in all important information. You might think some asset or debt isn’t worth bothering with, but you should disclose it just to be on the safe side. Anything, like a job on the side, assets, like cars, and any outstanding loans should be included.
Credit History
Keep in mind though that personal bankruptcy might prove a wiser choice for your credit history than keeping making late payments. While bankruptcy will haunt your credit history for up to ten years, your damaged credit will start healing right away. One of the best benefits to bankruptcy is the promise of a fresh start.
There are many pluses and minuses to filing bankruptcy. No matter why or what put you in this situation, the best thing you can do right now is educate yourself on the bankruptcy process. The advice found below can assist you in dealing with bankruptcy. Apply all of the knowledge you have gained from this article and you will be on your way to feeling more at ease about your bankruptcy.
This is a limited-time offer. We are not able to guarantee availability if you wait!
