Bankruptcy is serious, and should not be looked at as something that isn’t a big deal. Do not file unless you fully understand the consequences and implications. Apply the advice from this article to go down the right path. No matter what obstacles fall in your path, you can overcome them with good research.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal 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. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Be sure you’re doing what’s right before you file for bankruptcy. It is possible to take advantage of other options, like consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If you are in this situation, applying for a secured card may be the answer. This will allow you to start building a good credit history while minimizing the bank’s risk. In time, you might be granted unsecured credit again.
No matter what, don’t give up! When you file for bankruptcy you may be allowed to recover property like your car, electronics or jewelry that might have been repossessed. If it has been fewer than 90 days since you filed for bankruptcy, it is possible for you to get repossessed property back. Get help from your lawyer to file a petition so you can get your items back.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Chapter 13 Bankruptcy
Consider filing for Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. However, if you miss even one payment, the court will dismiss your entire case.
You can still take out a car loan or mortgage while you are in Chapter 13 bankruptcy. It is just tougher. You must meet with a trustee to gain approval for a new loan. Draft a personal budget to show that you will be able to repay your new loan. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Do not put off filing for bankruptcy. It is quite common for people to linger on hoping that their financial difficulties will somehow resolve; however, this very rarely happens. Debt could become uncontrollable and by not dealing with them properly, your wages could be garnished or you may find your home in foreclosure. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
Bankruptcy can get a bit tricky at times, but as long as you’re using what you learned here, the process should be a lot easier. Don’t be overwhelmed by the great wealth of information available to you. Take a moment to sort it all out and ponder the tips for a moment. That way, you stand a better chance of making a wise decision.