Filing for bankruptcy is not a fun thing to do. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. Using the tips in this article, you can learn how to avoid bankruptcy and get your finances on the right track.
It’s important that you understand what bankruptcy is and how it will change your life before you attempt to file a claim. The US Department of Justice, NACBA, and American Bankruptcy Institute websites are all great places to go for up-to-date information. The more you know, the better prepared you will be to make the best decisions and ensure that your bankruptcy goes smoothly.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. Because of this, transferring the debt to your credit card is pointless.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is important to be aware of this list so you will know what assets are saved. Without reading the list, you may be shocked at which possessions can be taken from you.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Seek free consultations from a handful of lawyers, before deciding which one to hire. Only make your decision if all your questions and concerns are adequately addressed. You can think about your decision before making a commitment. This offers you the opportunity to speak with other attorneys.
It is imperative that you know for sure that bankruptcy is the option you need. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Filling for bankruptcy could be a long and stressful process. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. You have to make certain that you absolutely have no other choice.
Be around family as much as possible. Going through bankruptcy is difficult. It is lengthy, stressful and often leaves people feeling ashamed, unworthy and guilty. A lot of people hide away until the entire proceedings have been played out. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. It’s crucial to spend time with loved ones despite your present financial situation.
If you are making more money than you owe, bankruptcy should not even be an option. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
You should weigh every option before thinking about bankruptcy. Before filing, talk with an attorney who can help you weigh all of your options. If you are looking at foreclosure, think about a loan modification program. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. Creditors would rather be repaid, however slowly, than have you declare bankruptcy.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. However, it can be more difficult. First, your trustee will have to approve the loan. You will need to come up with a budget and show that this new loan payment schedule is doable. They may also want to know why you believe you need the loan.
You do not always need to give in and file bankruptcy. Take the information provided here and avoid filing if at all possible. Start using the information you learned from this article and make changes so you may not have to ruin your credit history.