The thought of bankruptcy has brought feelings of anxiety and fear into the lives of many people. Increasing debt, coupled with the inability to support their families is a real nightmare for many people. If you are in a situation that may require a bankruptcy filing, don’t let fear overcome you. Read this article and learn valuable tips and advice to make this scary situation much more manageable.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. You should not use your retirement savings unless the situation calls for it. Though you may need to use a bit of your savings, try hard to maintain some of your reserves so that you have some degree of flexibility going forward.
When it comes to informing your attorney about your case, don’t be fearful. Don’t just assume that the attorney will remember it automatically. This is your future in their hands, so don’t be scared to mention it.
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 way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.
If bankruptcy is an option for you, secure the services of an attorney. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
60 Month Period
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. Your former ties with creditors will cease to exist. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. 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.
Meet with a few attorneys who offer free consultations before hiring one. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Looking for an attorney will help you find a lawyer you feel good around.
Be sure that bankruptcy really is your best option. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. Bankruptcy is a long process that can be stressful. It will have a major effect on your credit as time goes on. Because of this, filing for bankruptcy should only be used as a last resort.
There are many ways to resolve financial difficulties other than bankruptcy, and you should investigate all of them first. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Your lender can adjust your loan in many ways including extending the time you have to pay, reducing your interest rate, or canceling some of your late fees. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. In many cases, you can reduce your payment by filing a Chapter 7 petition. Here are the qualifications in regards to your vehicle: you must have bought it nine hundred and ten days or more before filing for personal bankruptcy; your loan must carry high interest; your work history must be steady and solid.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. But, it could be harder. You will need to secure the trustee’s approval for any new debt obligation. It is important to make a budget and prove that you are able to afford the payment. You should also be prepared to explain why you need to purchase the item.
If someone is scared of filing for personal bankruptcy, their feelings are completely legitimate. You may have been scared before, but this article has probably allayed your fears. Take these bankruptcy tips to heart and start improving the lives of you and your family members.