Personal bankruptcy may be the right option for folks who have had property seized by the IRS. Bankruptcy can play havoc with your credit, but is often unavoidable. Check out the following tips to see what filing for bankruptcy entails and what can happen if you do.
Exhaust every other option before making the decision to file for personal bankruptcy. You have other options available like consumer credit counselling services. Your credit record will be harmed by a bankruptcy filing, and therefore prior to making such a decision, it is wise to investigate other options in order to minimize the damage you suffer.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. The ties with the creditor will be broken. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Do some research about these options so you can choose the best one. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Spending time with the people you love is something you should do now. Filing for bankruptcy is a difficult process. It is extremely stressful and long, and it can leave you feeling ashamed of yourself. Many people decide to hide away from the world until the process is over. However, you will only feel worse about what has happened, which may lead you into depression. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Do not file for bankruptcy if your income is greater than your bills. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
If you are concerned about keeping your car, check with your attorney about lowering the monthly payment. A lot of the time, your payments may be lowered due to Chapter 7 bankruptcy. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
File when the time is right. Timing is very important when it comes to personal bankruptcy filings. In some situations it is best to file as soon as possible, but in other situations it is best to wait until after you’ve gotten through the worst of it. Speak with a bankruptcy lawyer to discuss the proper timing for you to file bankruptcy.
Bankruptcy should not be put off until the very last second. It is a big mistake to avoid financial problems, thinking they may go away on their own. Debts can get out of control fast. If you’re not taking care of these debts, you may be getting into trouble like wage garnishment. Once you’ve decided that you can’t manage your large amount of debt, it’s time to contact a qualified attorney.
Every single piece of financial information you have needs to be studied and properly listed when filing a bankruptcy claim. You can delay your bankruptcy process if you do not add in all important information. Even if it looks insignificant, you must add it to your documents. This type of income could come from doing odd jobs, extra cars or outstanding loans.
As mention earlier, you always have the option to file for bankruptcy. It is not something that should be done lightly, however, due to the negative effects it can have on one’s credit. Don’t sit back and let the process take control of you. Take control of the process by doing your research so that you don’t lose more than you need to.