Tips On Fixing Your Finances After Bankruptcy

Bankruptcy definitely causes short-term stress, but if you’re responsible, it can be a relief in the long term. On one side, you will need to handle a lot of people looking into your personal finances. This may be very uncomfortable; however, after your bankruptcy case has been completed, you can start anew free from the hassles of bill collectors. You can make bankruptcy easier with the following tips.

You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.

Unsecured Credit

After a bankruptcy, you may still see problems getting any kind of unsecured credit. A great way to rebuild your credit is to apply for a prepaid credit card. This will prove that you want to improve your credit score. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.

Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. If your debt is relatively low, you may be able to manage it with credit counseling. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.

Be certain that bankruptcy truly is your best option. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy is a stressful process. Your credit will be impacted for many years. This is why you must make sure bankruptcy is your last resort.

Speak with your attorney about ways you can keep your car. Often, you can negotiate a lower payment through bankruptcy. Your car must have been purchased more than 910 days prior to filing, be a high interest loan, and you must have had a steady work history for this to work.

Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. You may have your responsibility for your portion of the loan discharged under Chapter 7. Any co-debtor may well be held responsible for paying off the total remaining amount of the debt, though.

Make certain that you are fully aware of each and every bankruptcy law prior to even considering filing. You need to know certain things, like the fact that it’s illegal to transfer any asserts 12 months before filing your claim. Maxing out your credit cards immediately before filing is also illegal.

If you know that you are about to file for bankruptcy, don’t exploit the information asymmetry and get huge cash advances on your credit cards. This fraudulent practice is a demonstration of bad faith. Debts you incur this way will likely not be discharged in a bankruptcy, and you will still have to repay them.

Be mindful of paying off outstanding obligations before you file a bankruptcy petition. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Learn the rules regarding bankruptcy before making any final financial decisions.

When you have decided that bankruptcy is the right route for you to take, you need to act relatively quickly. Yes, it may be hard to admit the need for help, however, if you try to stall from getting help your situation can only worsen. When you speak with a professional quickly, you will get valuable advice that will help to prevent your situation from spinning out of control.

You do not lose everything that you own when you decide to declare bankruptcy. Personal property can be kept. Things like jewelry, clothes, and electronics are included in this category. This will depend on your state’s laws, the type of bankruptcy you file for, and your financial situation, but you may be able to retain large assets like your home and car.

Once you have met with an attorney, you may be given a telephone number for your creditors to confirm you are filing bankruptcy. All you have to do is provide the number. Your creditor can then call and confirm that this debt is included in your bankruptcy filing. Then, you won’t have to worry about any further harassing phone calls.

Chapter 7

If you cannot qualify for a Homestead Exemption when filing for Chapter 7 bankruptcy, it is possible you might also be able to do Chapter 13 too, simply for your mortgage. You may be better off converting your Chapter 7 filing to a Chapter 13 bankruptcy, and it is important to talk to an experienced attorney regarding your next move.

When hiring an attorney, make sure he has bankruptcy experience. There are a lot of lawyers available to help you. The inexpensive lawyers will probably fail in the knowledge department. Avoid the temptation to jump on board.

It is possible to re-file for bankruptcy if your first case is dismissed due to an error. Yet in most cases, the automatic stay is only for about a month. If you can convince the judge that you have a good reason for your mistake and re-filing, you may get that stay extended.

Bankruptcy has several pros and cons. It doesn’t matter why you have to file, but you must be properly educated. Apply the tips from this article to help make your bankruptcy an easier process. As long as you implement these tips how you read them, you should be able to make much more sense of the process.

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