Life after a bankruptcy may be quite challenging. When you’re in a bind, financially, you may find that you have limited options. Despite a bankruptcy on your record and a dinged credit score, you can often still get loans if you need them.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. 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. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Always remind your lawyer of specifics that are important to your case. It is wrong to assume that your lawyer will remember every word you ever utter! This is your bankruptcy and your future, so never be nervous about speaking your mind.
Research what assets are exempt from seizure before you decide to declare bankruptcy. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. It is important to be aware of this list so you will know what assets are saved. If you aren’t aware of this, you could lose some assets that you value.
Do not give up hope. Filing for bankruptcy may allow you to get back property, such as an auto, jewelry, or electronics, that you may have had repossessed. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Speak to a lawyer who will be able to help you file the necessary paperwork.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Choose an attorney who is experienced, educated and well-versed in bankruptcy laws. It is not necessary to decide immediately after your consultation. Consulting with several attorneys will also help you find someone you trust.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
You need to educate yourself on the differences between Chapter 7 and Chapter 13. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. This includes creditors and your relationship with them will become no longer existent. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
Consider if Chapter 13 bankruptcy is an option. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.
Always make your loved ones a priority. Bankruptcy proceedings can be extremely harsh. This long and stressful process can leave a person feeling guilt ridden, unworthy and ashamed. It can be hard to face the world while the bankruptcy process is taking place. However, this isolation will just make you feel worse, and it could cause you to be depressed. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
Find ways to relax while you go through the process of filing for bankruptcy. A lot of debtors usually get stressed when they file. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Life will get better after you finally get this situation over with.
Your trustee may be able to help you secure an auto loan or get a mortgage even though you have filed Chapter 13. However, it can be more difficult. First, your trustee will have to approve the loan. You will need to make a budget and prove that you will be able to afford your new loan payments. You will need to be able to explain why the purchase is necessary.
Filing for bankruptcy does not have to mean you are financially limited in the future. Through the saving of money and striving to reestablish your credit, creditors will take this to heart. Build up your savings and see what kind of deal you can get when you apply for a car loan or a mortgage.