Filing for personal bankruptcy is an option that anyone with property repossessions should consider. Bankruptcy can play havoc with your credit, but is often unavoidable. Pay attention to what this article is teaching you about bankruptcies and their pitfalls.
Have a good look around the Internet to see what information is relevant to you regarding bankruptcy. The United States DoJ along with other private and nonprofit organizations all have insightful knowledge. The more you know, the better prepared you will be to make the best decisions and ensure that your bankruptcy goes smoothly.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. If the tax can be discharged, so can the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Always be honest with the information you give about your finances. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Unsecured Credit
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. After some time passes they may be willing to offer you unsecured credit.
Make sure you are completely honest when filing for bankruptcy. Hiding your assets is never wise. The professional that helps you file for bankruptcy has to have a complete and accurate picture of your financial condition. Do not hold back anything, and form a sound plan to make peace with your reality.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. Those with smaller debts may find use in a program for consumer credit counseling. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. By researching each type, you can begin to understand which method is right for you. If something doesn’t make sense to you, go over it with your lawyer prior to choosing which one to file.
Chapter 13
Consider filing a Chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. This lasts for three to five years and after this, your unsecured debt will be discharged. Missing a payment under these plans can result in total dismissal by the courts.
Don’t hide from your friends and family while you go through bankruptcy. The whole process of filing for bankruptcy is hard. Having to declare bankruptcy leaves many people feeling like a failure. Some folks tend to stay in the shadows until their case has concluded. Self-imposed isolation can make you feel worse about it and can cause depression. Time spent with people who care about you can give you new perspective on your financial situation.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. However, it will be a longer and more arduous task. You will have to see your trustee and the approval for this new loan. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. You will always have to let them know why this item needs to be purchased.
Know your bankruptcy rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
Take action when the time is right. They say timing is everything, and this rings true when filing for bankruptcy. For some people, filing right away is best, however for others, waiting a while is best. Speak with bankruptcy attorneys for a time frame for filing with your situation.
Include your entire financial information when you file for bankruptcy. If the court thinks you are attempting to conceal information, your petition could be denied. Add absolutely everything to your list, including small amounts. This can include side jobs, any vehicles to be counted as assets, and any loans you may currently have.
After filing for bankruptcy, many individuals vow they will avoid the use of credit cards and all forms of credit. This is actually a poor idea because credit helps to build good credit. You have to reestablish your credit once you hurt it, this way you can still position yourself to take out things, such as home or car loans, in the future. Start with one single credit card, and rebuild your credit once more.
It goes without saying that, bankruptcy is always available as an option. Of course, it may not be best for all situations and can even make your credit matters worse. Knowing how to best go through the bankruptcy process can reduce one’s troubles in the long run and make it easier to retain one’s possessions.
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