Bankruptcy can be something that is difficult to live with. When you’re in a bind, financially, you may find that you have limited options. Nonetheless, it is possible for you to continue getting the things you need (e.g. a home loan or an automobile loan) even if you have a very low credit score.
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. A common rule is that dischargeable tax means dischargeable debt. It is pointless to use credit cards if they can be discharged.
Always be honest when filling out paperwork. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. Some companies just want to take advantage of you, so it is important that you have help from someone you trust.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. The lawyer representing you when you file needs to have full knowledge of your financial situation. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
There are differences between Chapter 13 bankruptcy and Chapter 7; be sure to familiarize yourself with both. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Before you file for bankruptcy, make sure you absolutely need to. Consider whether debt consolidation may be a more viable alternative. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. Credit will be much harder for you to come by after you file for bankruptcy. You have to make certain that you absolutely have no other choice.
Do not file for bankruptcy if your income is greater than your bills. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. It is much harder. You will have to get this loan approved by your trustee. Draft a personal budget to show that you will be able to repay your new loan. You will also need to explain why it is necessary for you to take out the loan.
If you are filing for bankruptcy, it is imperative that you have a good understanding of your rights. There are bill collectors who will claim that you cannot add your debts to your bankruptcy case. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. A lot of people have a negative opinion of bankruptcy, mostly because they misunderstand this procedure. These feelings, however, are of no benefit to anyone, and they can be detrimental to your mental health. The best way of dealing with bankruptcy is to keep a positive attitude during this time of financial upset.
Consider any other options available before filing for personal bankruptcy. One good option might be credit counseling. Many different non-profit entities exist that can assist you without charging you any fees. Their job is to lower your payments and interest through negotiations with your creditors. You’ll make your payments to the company, and the company will pay off your creditors.
Bankruptcy is not a financial death sentence. Lenders look kindly on you if you can prove you are saving your money and trying to re-establish your credit. Eventually, you will be able to brush every bit of that dirt off of your shoulders and once again be able to live a normal, credit-driven life if you so choose.