Filing for bankruptcy is not a pleasant experience. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. Follow the steps presented here to determine whether or not you need to file for personal bankruptcy at all.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. If the tax has the ability to be eliminated, the debt can be too. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. You have other options, including consumer credit counseling help. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. Your attorney and trustee should be privy to all information about your finances. Do not hold back anything, and form a sound plan to make peace with your reality.
If you are meeting with a lawyer to discuss bankruptcy, the initial consultation should be free so ask every question you have. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Do not make any final decisions until every question you have has been answered. After your consultation, take your time to make your decision. After your consultations, do some additional research on each attorney you consider qualified for the job.
Safeguard your home. Filing for bankruptcy does not mean you have to lose your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
If you are making more money than you owe, bankruptcy should not even be an option. Though bankruptcy may appear to be a good way to escape your debts, it does affect your credit negatively for a fairly long time.
Don’t forget to enjoy your life once your finances get fixed. It’s easy to be stressed during this time. That stress can cause depression, if you don’t take care to avoid it. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
If your vehicle is in question, perhaps your attorney can assist in lowering your payments. Often, you can negotiate a lower payment through bankruptcy. There are a few requirements that you have to meet to be eligible, though. You have to have bought the car more than 2.5 years ago, your loan’s interest rate needs to be over a certain amount, and your employment history has to be good.
Don’t wait to file for bankruptcy. It is quite common for people to linger on hoping that their financial difficulties will somehow resolve; however, this very rarely happens. Debts can get out of control fast. If you’re not taking care of these debts, you may be getting into trouble like wage garnishment. The minute you realize that your debts are too big to take care of, contact a bankruptcy attorney to discuss your options.
Before filing for bankruptcy, you must be educated on the specifics of all bankruptcy laws. There are many pitfalls you can easily fall into, such as transferring away assets to prevent them from being included in the filing. Other laws you need to know include debt-based regulations. You cannot increase debt via credit cards prior to filing a claim. Your finances basically have to remain frozen.
Learn and understand the laws and rules regarding personal bankruptcy filings, before you decide to file. There are several pitfalls with personal bankruptcy that can make your case harder to handle. Some mistakes could lead to having your case dismissed. Before you go forward, make sure you thoroughly research personal bankruptcy. The proceedings will be much smoother with this information.
Clearly, filing for personal bankruptcy is not your only option. The advice in this article will be valuable as you work to find another financial path. Use what you’ve learned here to see how much you’re able to change things now so you aren’t harming your credit history.