Bankruptcy is a painful experience for anyone who must face it. It is a difficult and embarrassing process that no one wants to go through. If you decide to file bankruptcy, research the laws in your state and retain the services of a qualified attorney.
Many people need to file for bankruptcy when they owe more money than they can pay off. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state so it is important to do your research. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. If the tax can be discharged, so can the debt. 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 the bankruptcy is complete, you may find it difficult to receive unsecured credit. If you find yourself in this situation, you may want to think about getting a secured card or two. By doing this, you will be letting people know that you want to fix your credit score. In time, you might be granted unsecured credit again.
Ensure that you bankruptcy is your best choice. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy is not a simple, breezy course of action that should be taken lightly. The future of your credit will be greatly affected. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Think about all the choices available to you when you file for bankruptcy. Talk with a bankruptcy lawyer and ask about alternatives, such as debt consolidation or negotiating with creditors. If you are looking at foreclosure, think about a loan modification program. These plans allow you a longer pay off period by extending the term of the loan, reducing the rate of interest or forgiving late fees. When all is said and done, creditors want their money and find repayment plans preferable to not getting paid at all.
Once the initial filing period is over, ensure that you are getting out and enjoying life. Filing for personal bankruptcy can be very stressful for the debtor. Depression can ensue from the stress if action isn’t taken. Remember that your situation is going to improve after you file for bankruptcy.
Before filing for bankruptcy, learn your rights. Bill collectors can try to scare you into believing that your debt will not be cleared. You should know that only a few debts cannot be erased, including student loans and child support. If you are told by a debt collector that your debts are not dischargeable, make a record of your conversation and report the individual to the proper state authorities.
Bankruptcy can cause anxiety and a host of other physical and emotional issues. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Don’t skimp when hiring a good lawyer. The most expensive attorneys are not necessarily the best ones. Ask people who have used a bankruptcy lawyer for referrals, look them up at your local Better Business Bureau, then schedule free consultations in order to interview them. You can attend court hearings if you want to see a prospective attorney in action.
Make a list of all your debts before filing. Failing to disclose all of your financial information can cause your bankruptcy petition to be dismissed, or, at the very least, delayed. Add every summer, no matter how insignificant, to your documentation. This includes income from second or part time jobs, vehicles and loans.
Do not drag your feet when trying to figure out if bankruptcy is right for you. Yes, it may be hard to admit the need for help, however, if you try to stall from getting help your situation can only worsen. Speaking with someone knowledgeable as soon as you can helps get you started on the bankruptcy process before your situation becomes any worse.
Realize that bankruptcy, ultimately, might be better for your credit than continuing to make late payments or miss payments on your debt. While bankruptcy will show up in you credit file for the next 10 years, you can begin the process of making your credit situation better right away. In other words, bankruptcy can give you an opportunity to start over if handled correctly.
A lot of individuals who have found themselves filing for bankruptcy think that they will never borrow money or use a credit card again. This is not wise because you need to rebuild a good credit file. If you never work on rebuilding your credit after a bankruptcy, you may not be able to qualify for a car loan or mortgage. Start with having a single credit card to help you go in the proper direction.
Make wise decisions when choosing a lawyer. There are many new or inexperienced newcomers who choose this field to practice in. Be sure the attorney you retain has at least five years of experience and is board certified. By searching online, you can find background information about lawyers along with client ratings and any disciplinary record an attorney may have.
There is no need to rush to file for bankruptcy. What you’ve learned from this article can put you on a corrective path, use it wisely. Learn to live within your means and bankruptcy may be avoided.