Drowning in debt can be overwhelming. In some cases, what started as a manageable amount of debt turns into an insurmountable challenge. Although it is a long and difficult process, there are ways to get through it unharmed and restore your finances. Read on to find tips, insight, and valuable information for clearing your debt and getting a firm grasp on your finances.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If you’re in this situation, learn about the laws where you live. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. Some states may protect you home, and some may not. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. If the tax can be discharged, so can the debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. Your attorney and trustee should be privy to all information about your finances. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
You need to educate yourself on the differences between Chapter 7 and Chapter 13. Chapter 7 is the best option to erase your debts for good. Any debts that you owe to creditors will be wiped clean. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
Make sure your home is safe. Filing for bankruptcy does not mean you have to lose your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Remember that the record of your personal bankruptcy filing will be discernible on the report of your credit for as many as 10 years. For this reason, bankruptcy filing should not be taken lightly.
Before you make the decision to file Chapter 7 personal bankruptcy, take time to think about anyone it could affect. If you choose Chapter 7, you are no longer responsible for joint debts. However, creditors can demand co-debtors pay the amount in full.
Don’t file for bankruptcy without knowing your rights. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. You should know that only a few debts cannot be erased, including student loans and child support. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
It is important to not wait for the final minute to petition for bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. It is easy you to lose control of your debt, and avoiding the problem will make things worse. As soon as you know that you are too far over your head, make the move to call an attorney skilled in bankruptcy court, to weigh your options.
Sometimes in life things just happen which are out of your control. This article just gave you a few good pointers on what you can do in order to gain control of your finances when facing bankruptcy. Apply the tips you learned from this article into your life.