Bankruptcy filings bring both worry and relief, simultaneously. On one hand, having people go through all of your personal financial information can be formidable. On the other, you get to enjoy the peace that comes when the bill collectors stop calling you. The following article will give you advice to make filing for bankruptcy simpler.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. A common rule is that dischargeable tax means dischargeable debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Ask yourself if filing for bankruptcy is the right thing to do. Consider any other options that are available to you, such as consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Filing Bankruptcy
Find out what you exemptions are prior to filing bankruptcy. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Make certain that you comprehend the differences between Chapters 7 and 13. Chapter 7 bankruptcy completely wipes out your debt. Your responsibilities to your creditors will be satisfied. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
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. Meet with the actual lawyer, not a paralegal or assistant, as they’re not allowed to give out legal advice. Comparing different lawyers makes it possible to find one with whom you work well.
Safeguard your home. Bankruptcy filings don’t necessarily have to end in the loss of your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. Check to see if you pass the requirements necessary to file for a homestead exemption.
Chapter 13 Bankruptcy
Thing about filing a Chapter 13 bankruptcy. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. This lasts for three to five years and after this, your unsecured debt will be discharged. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
If you make more money than you need to pay your bills, you should not file for personal bankruptcy. You should know that filing for bankruptcy will ruin your credit score for at least ten years and that improving your credit score will be expensive.
There are pros and cons to filing bankruptcy. Each person has their own reasons to file. Your job is to make sure you keep all the information you can on hand, as you progress. The advice found below can assist you in dealing with bankruptcy. If you use these tips, you can file for bankruptcy with the confidence that only information can instill.
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