The Pros And Cons Of Considering Personal Bankruptcy

Anger, anguish, frustration, and sadness are all emotions felt by those who experience personal bankruptcy. People can feel stuck in their situation, worrying how to do basic things, such as keeping food on the table each day. You are never truly stuck — there are always options that you can pursue that may include filing personal bankruptcy; keep reading for more information.

If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. If the tax has the ability to be eliminated, the debt can be too. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.

Credit History

Think through your decision to file for bankruptcy carefully before going ahead with it. You can find services like counseling for credit that consumers can use. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.

Don’t be afraid to remind your attorney of certain details in your case. Don’t assume that he will remember something you told him weeks ago. Speak up if something is troubling you, as this is your future we are talking about here.

Secured Cards

Once you file for bankruptcy, you will have a hard time getting loans or credits. If that’s the case, it is beneficial to apply for one or even two secured cards. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.

Before you decide to file bankruptcy proceedings, determine which assets will be safe. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Make sure to review the list before filing a claim so you know if your valuables will be subject to seizure. You wouldn’t want to unexpectedly lose any possessions you treasure.

You should be able to meet with a specialized lawyer for free to ask your questions. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Do not make any final decisions until every question you have has been answered. It is not necessary to make a final decision right away. You could even go to different lawyers for advice.

Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. For example, you want to look into credit counseling. This is the best option for small debts. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.

Chapter 7

Be sure you know how Chapter 7 and Chapter 13 differ. Every one of your debts will be gone if you decide to go with Chapter 7. Your former ties with creditors will cease to exist. With a chapter 13 bankruptcy, a 60 month period of time will be established in which you will repay the as much of your debt as possible. Following the 60 month period of time, the remainder of your debt will be excused. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.

Consider filing a Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. The benefit of this plan is that you retain personal belongings and private real estate and your debts are repaid by an organized payment plan. This lasts for three to five years and after this, your unsecured debt will be discharged. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.

Know your bankruptcy rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.

Filing for bankruptcy doesn’t mean you will lose all your assets. You will be able to keep your personal property. In other words, your clothes, your television, your computer, your furniture, your jewelry and other household items are safe. The laws of your state and the kind of bankruptcy for which you are filing, coupled with your financial situation, will determine what personal property you are allowed to retain. Additionally, the retention of large assets, such as your automobile and your home, is determined by these considerations.

You should now see there is hope, even if you have had to file for bankruptcy. It may be difficult at first, but you can overcome bankruptcy. By using the advice that has been given to you, you can find a way to clear up your personal debt.

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