You can be engulfed with an assortment of emotions when you have to file for bankruptcy. These feelings can make it hard to make it through the day, and can leave people feeling stuck. As you will soon learn, there is a way out.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Don’t feel bad if you need to remind your attorney about any specifics of your case. Inaccurate or incomplete information can lead to your petition being denied. Speak up if something is troubling you, as this is your future we are talking about here.
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If so, apply for a secured credit card. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After a while, you may be able to get unsecured credit again.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. The lawyer representing you when you file needs to have full knowledge of your financial situation. Don’t withhold information, and create a smart way of coping with the reality of the situation.
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. All of your financial ties to the people you owe money to will disappear. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
It’s a good idea to meet with a number of bankruptcy lawyers before settling upon one. The majority of them offer free initial consultations. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. Looking for an attorney will help you find a lawyer you feel good around.
It is important to protect your home when filing bankruptcy. Filing for bankruptcy doesn’t automatically involve losing your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. It is much harder. You will have to get this loan approved by your trustee. You need to show them why and how you can handle paying back the new loan. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. It is not unusual for creditors to claim that their debt is not able to be discharged. There are not many debts that can not be bankrupted, student loans and child support for example. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Act when the time is right. Proper timing is important, especially when it comes to personal bankruptcy. Sometimes, it is good to file immediately, but sometimes it is smarter to wait until you have passed through the worst of things. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
With any luck, this piece has shown you that financial roadblocks are not necessarily the end of the world. Although you may feel bothered at first, you will see that you can overcome the effects of bankruptcy. Put the information you have found in this article to use so that you can have a very successful bankruptcy.