Tips On Filing For Personal Bankruptcy

The path to bankruptcy is not normally a happy one, but your life can improve once the filing has occurred. The bankruptcy option was created to give you another chance to live a financially responsible life. The article you’re about to read contains great information on bankruptcy and how you can proceed with filing a claim.

Credit Card

If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. A common rule is that dischargeable tax means dischargeable debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.

Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.

Be sure to enlist the help of a lawyer if you’re going to be filing for bankruptcy. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. A personal bankruptcy attorney can help and guide you along through the bankruptcy process.

Chapter 7

Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. The Chapter 7 variety can help you eliminate your debts almost entirely. You will no longer be liable for any money that you owe to your creditors. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.

It is important to know how Chapter 7 filings differ from Chapter 13 filings. Spend time researching the advantages and disadvantages of filing for each one of these. Engage your attorney in a conversation about each type, and ask him to answer any questions you may have before deciding which kind is right for you.

Before filing for bankruptcy ensure that the need is there. Perhaps consolidating your existing debt can make it easier to manage. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will have a long-lasting effect of your future credit opportunities. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.

Repayment Plan

Look at all of your options prior to deciding to file for bankruptcy. Talk to a bankruptcy lawyer to see if a debt repayment plan or reduction in interest rates is a viable option for you instead of bankruptcy. Various loan plans out there can be a lifesaver if you’re facing a foreclosure. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.

You may want to see if you can get lower payments on your vehicle if you want to keep it. Chapter 7 bankruptcy is one of the most common and effective. There are qualifications, such as the loan being high interest and a good work record for this option.

You can take out a mortgage or car loan while filing Chapter 13 bankruptcy. Of course, it’s difficult. You have to meet with your trustee to get approval for the new loan. Document your budget to prove that you’re going to be able to make the payments. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.

File for bankruptcy before your finances get completely out of control. Do not avoid your creditors; they will not go away. It is important to decide on a course of action as soon as you begin experiencing financial problems. All your personal debts will easily go haywire, building and collapsing very quickly. This often leads to foreclosures and garnishments. As soon as you know that you are too far over your head, make the move to call an attorney skilled in bankruptcy court, to weigh your options.

As mentioned earlier, the events that drive anyone to declaring financial bankruptcy are not a happy story. The initial process might be difficult and draining, but there’s something special waiting on the other side. Actually, if you use the advice and ideas from this article, you will be able to turn bankruptcy into a turning point for your life.

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