The economy is in very bad shape right now. A lot of people with no jobs find themselves in debt. Debts result in bankruptcy, which is never a good thing. If you’re considering bankruptcy, the following article can help you make some sense out of it.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Instead of jumping into a bankruptcy filing, be sure your situation requires it. You have better options. For example, you could try credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. Bankruptcy exemptions are properties may not be seized during bankruptcy. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Don’t throw in the towel. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If your property has been repossessed less than 90 days prior to your bankruptcy filing, there is a good chance you can get it back. Get the advice of a qualified attorney who can advise you about ways to accomplish this.
Do some research to find out more about Chapter 13 and Chapter 7. In Chapter 7 bankruptcy, your debts are all eliminated. Your former ties with creditors will cease to exist. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Always protect your house. Filing for bankruptcy does not mean you have to lose your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. You are still going to want to check into homestead exemption either way just in case.
Look into all of your options before you choose to file for bankruptcy. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Remember that creditors desire to get paid and usually debt repayments are often preferable when dealing with bankrupt debtors.
Remember to have fun with your life when you’re done with the filing process initially. Many debtors stress-out during the time of filing. Depression can ensue from the stress if action isn’t taken. You must realize that things will get better over time.
The economy is not in great shape right now, and although things are slowly getting better, there are still large numbers of people out of work and in debt. Although bankruptcy can be avoided in some cases; there are other cases where bankruptcy is the only sensible option. Now you know all the options available to avoid bankruptcy, if at all possible. Put this advice to work for you starting today.