Just thinking of filing for bankruptcy can scare a person. Between rising debt and pressure from the family, it can leave you sleepless at night. If you are haunted by these terrible thoughts, or are about to go through with this, this article will help you in the process.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. This means using a credit card is not necessary, when it will just be discharged.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should never touch your retirement accounts, unless you have absolutely no choice. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Never shirk on the truth in your petition for 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.
Meet with a few attorneys who offer free consultations before hiring one. Talk to the lawyer and not his assistant, who may not be legally able to help you. Interviewing multiple attorneys is a good way to find the best fit.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Weigh all the information you can find on- and off-line to make an educated decision. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
It is imperative that you know for sure that bankruptcy is the option you need. You might be better off consolidating your debt or availing yourself of some other remedy. Bankruptcy is a long process that can be stressful. The future of your credit will be greatly affected. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
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. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
Timing is everything. The timing of your filing could be important to its success. Sometimes, you may need to file quickly; however, at other times, you should wait until the worst is over. Have a chat with a bankruptcy specialist to discover when the ultimate time would be for you to file.
Do not take too long deciding that it is time to declare bankruptcy. As with anything in life, putting off important things such as debt repayment can snowball quickly out of control. When you talk to someone professional in a timely manner, you will be able to get advice on what you can do prior to it getting too complicated.
Before you file make sure that you are not doing anything to bring yourself in debt any more. In other words, you do not want to waste your efforts here by starting to ring up more and more debt. Your creditors will take your current finances into account when assessing your bankruptcy filing. Your current spending behavior should show that you are making a real effort to modify your financial habits.
Filing for bankruptcy doesn’t mean you will lose all your assets. You will be able to keep your personal property. Items like clothes, electronics, household furnishings, and jewelry are included in that category. This depends on the laws in your state, the bankruptcy type for which you file, and your unique finance situation, but it may be possible to retain your home, car and other large assets.
Write down every one of your debts. This will be your basis in filing for bankruptcy, so see to it that you write down all of the debts you’re aware of. Obviously, you’re going to want to leave no stone unturned. Rummage through your files and records and receipts to come up with precise numbers. It is important that you take your time here; you need to ensure your figures are correct if you want to get these amounts discharged.
Don’t stop the the bankruptcy process if you find a job. It might still be wisest to file for bankruptcy. The timing of filing is a huge factor. As long as your bankruptcy filing is posted prior to receiving income from your new job, this additional income will not be considered.
People who fear bankruptcy are wise to do so, because it is never a pleasant experience. However, bankruptcy is not the end of the world, and this article is here to help you understand how not to be overwhelmed by it. Using the personal bankruptcy advice in this article can help improve your financial situation.