It can be hard to file bankruptcy. When things are tough financially, your credit options are limited. Even with a bad credit score, it is still possible to overcome financial hurdles, as you will see if you keep reading.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. If this applies to you, be sure that you know what the laws of your state are. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. In some states, your home is protected, while in others it is not. It is important to be cognizant of the laws in your state before filing for bankruptcy.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The U.S. The Department of Justice is just one resource of information available to you. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Unsecured Credit
Getting unsecured credit post-bankruptcy will likely be difficult. A great way to rebuild your credit is to apply for a prepaid credit card. By doing this, you will be letting people know that you want to fix your credit score. After some time passes they may be willing to offer you unsecured credit.
Do some research to find out which assets you could lose by filing for personal bankruptcy. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. Make sure to review the list before filing a claim so you know if your valuables will be subject to seizure. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
It is imperative that you retain an experienced attorney if you are planning to file bankruptcy. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
Chapter 13
Consider if Chapter 13 bankruptcy is an option. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. You can secure your home under Chapter 13 and pay your debts with a payment plan. 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.
Know your rights when filing for bankruptcy. Collectors may try to convince you that your debt can’t be discharged. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If the bill collector is trying to deceive you, then report that company to your local attorney general’s office.
If you plan on filing bankruptcy, never wait too long. It is all too common for people to hope that their financial difficulties will disappear if they don’t give them any attention. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. 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.
Even if you go bankrupt, you do not need to be limited forever. Lenders will look more favorably upon you if you show them that you are trying to save money and make whatever payments you can. So implement a savings program, and watch how much it helps you when you need to apply for a home or car loan.
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