Bankruptcy can be both a relief and a major stressor. On one side, you will need to handle a lot of people looking into your personal finances. On the other side, you will no longer receive calls from bill collectors and you can work on your finances. These tips can make bankruptcy much easier.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. By being well armed with the correct knowledge, you can be certain of the decision that you have made. Additionally, you will understand the processes necessary to conduct your personal bankruptcy matters in a smooth manner.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. It is pointless to use credit cards if they can be discharged.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Don’t touch retirement accounts unless you don’t have a choice. You may need to tap your savings, but don’t empty your savings account, as this could leave you in a difficult situation down the road.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. If you find yourself in this situation, you may want to think about getting a secured card or two. This at least shows you are making an honest attempt at reestablishing your credit worthiness. After a time, you are going to be able to have unsecured credit cards too.
Hire a lawyer if you plan on filing for bankruptcy. You might not understand all of the various aspects to filing for bankruptcy. A specialized bankruptcy lawyer can ensure that you are handling your bankruptcy filing the right way.
Know and understand the difference between filing for Chapter 7 bankruptcy versus Chapter 13 bankruptcy. Do some research about these options so you can choose the best one. Before making any decisions, discuss the information you have learned with your lawyer.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If you owe an amount under $250,000 and have a consistent income source, 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. Typically, any plan you develop will last around 3-5 years. Afterwards, any remaining unsecured debts will be discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Do not put off filing for bankruptcy. Some folks ignore financial difficulties for a long time, and this can be disastrous. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. Consider all possible options before filing bankruptcy.
A lot of individuals who have found themselves filing for bankruptcy think that they will never borrow money or use a credit card again. This is actually a poor idea because credit helps to build good credit. If you never use credit, you won’t be able to rebuild the good credit that you will need to make future purchases. Start with one single credit card, and rebuild your credit once more.
You need to start getting responsible with your money even before you file for bankruptcy. You must not doing anything that will raise your current level of indebtedness for several months before filing a bankruptcy petition. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. Even though you may have found yourself in a bind, you want to show them that you are trying to make serious efforts to stabilize your finances.
Remember to include all the debt that you want to eliminate when you file your bankruptcy papers. Anything not specifically listed on the filing will be excluded in the final bankruptcy. It is up to you to ensure your debts are written down so you don’t need to pay bills that might have been discharged.
Even if you become employed soon after filing for bankruptcy, you should continue with your plan. It is possible that bankruptcy is still your best course of action. The timing of your filing is also going to be important. If you get your filing posted before you start gaining new income, your means of repayment will be evaluated without taking it into account.
If you are facing financial difficulty, it may not be wise to go through with a divorce. Divorce can bring on a lot of major changes, finances being one of them, and sometimes filing for bankruptcy is the only option. Reconsidering divorce is usually the best option in any case.
There are many pluses and minuses to filing bankruptcy. No matter your reason for going through with it, remember that information is essential to the whole process. What you read above can easily help you get a handle on the entire process. Make good use of these tips. You will be glad you did.