Many people are in debt these days. Threats come from collection agencies and other creditors while the bills just keep piling up. If this sounds a lot like your personal situation, you may have started thinking about filing for bankruptcy. Continue reading this article so you can figure out if this is something you should do.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Think through your decision to file for bankruptcy carefully before going ahead with it. Alternatives do exist, including consumer credit counseling. 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.
Research what assets are exempt from seizure before you decide to declare bankruptcy. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.
Stay positive. If you file for bankruptcy at the right time it could enable you to get your property back that you lost to repossession. If you have property repossessed less than ninety days prior to filing your bankruptcy, you may be able to get it back. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
Many bankruptcy attorneys offer the first consultation with no charge, so consult with several before deciding on one. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Comparing different lawyers makes it possible to find one with whom you work well.
Safeguard your home. You do not have to lose your home in the process of a bankruptcy. Depending on certain conditions, you may very well end up being able to keep your home. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. This is harder. Before you can take out a new loan, you will have to clear it with your trustee. Draw up a budget, demonstrating that you can afford the new loan payment. Also, you need to be ready to say why you’re going to need the item.
Don’t let shame consume you during the bankruptcy process. Bankruptcy can sometimes leave people feeling guilty, ashamed and alone. Feeling like this will not help your situation and can actually do serious damage to your mental well-being. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Be aware of the fact that you may be under a great of stress while you deal with your bankruptcy. One way to help reduce is this stress is to hire a reliable attorney. Do not let price be the only factor. Quality is far more important than expense when it comes to a good bankruptcy attorney. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. Often, watching a bankruptcy proceeding can give you clues to the quality of a lawyer.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Not only that, but the filer cannot lawfully accrue additional debt just prior to filing.
Prior to filing, do not use your credit card to get a cash advance, knowing your debts will be eliminated. This is against the law and it is fraud. After the bankruptcy process you can be made to pay it all back to the creditor.
Don’t take too long when trying to decide whether you want to file bankruptcy. While it may be difficult to accept that you are in trouble, waiting only prolongs the agony. If you talk to a financial professional, they can assess your situation and give you suggestions on what could solve the problem.
If you have reached a point where you are forced to file bankruptcy, you can now understand that many resources are available to help you. You can get freedom from economic stress and get back on an even playing field financially, if you take a steady and focused approach to the matter.