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. This article is filled with useful tips to help you get through bankruptcy.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States Department of Justice and American Bankruptcy Institute are two such places to look. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. A common rule is that dischargeable tax means dischargeable debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Don’t hire an attorney who fails to address all your concerns and questions. It is not necessary to decide immediately after your consultation. You can take as much time as you need to meet with different lawyers.
Before declaring bankruptcy, be sure you’ve weighed other options. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Become knowledgeable in regards to details about chapter seven bankruptcy vs. chapter 13 bankruptcy. Weigh all the information you can find on- and off-line to make an educated decision. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.
Make sure that you really need to file for bankruptcy. You might be better off consolidating your debt or availing yourself of some other remedy. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. Having a bankruptcy on your record will hinder your ability to get credit in the future. You have to make certain that you absolutely have no other choice.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If you have a regular source of income and less than $250,000 in unsecured debt, you can file for Chapter 13 bankruptcy. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Consider that if you even miss one payment, your case will not be considered by the court.
Look at all the alternatives to bankruptcy before filing. Some alternatives to filing for personal bankruptcy include debt repayment plans, interest rate reduction plans, and debt consolidation. Talk with the personal bankruptcy lawyer to find out more. If foreclosure looms, think about getting your loan plan modified. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. After all is said and done, your creditors will still want their money. For this reason, you may wish to investigate debt repayment programs in lieu of bankruptcy programs.
If you’re concerned about the details of keeping your car, try to ask your attorney about details regarding lowering your monthly payments. It is possible to get your car payment lowered if you file using Chapter 7. If you meet the criteria specific to your state, it may be a good option to consider.
Don’t let shame consume you during the bankruptcy process. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. These are useless emotions, however, and can be harmful to your mental state. Staying positive and upbeat is the proper way to deal with bankruptcy.
There are pros and cons to filing bankruptcy. Never forget that being well-informed is always the key to a successful bankruptcy, no matter what your reasons for filing are. These tips can make dealing with bankruptcy easier. Utilize these tips and let them guide you towards a stress-free financial future.