The economy is not in good shape. The bad economy has contributed to more job losses and mounting personal debt. Many of these debts end up in bankruptcy filings, which just makes the problem worse. If a family member or a loved one is on the verge of filing for bankruptcy, the following article can help you understand more about the process and whether it offers an appropriate solution.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Do not hesitate to remind your lawyer of any details regarding your case. Never assume that they can remember all details without reminders. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.
Once you file for bankruptcy, you will have a hard time getting loans or credits. A great way to rebuild your credit is to apply for a prepaid credit card. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. If you do well with a secured card and make strides to repair your credit, you will ultimately be able to receive an unsecured card.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. The professional that helps you file for bankruptcy has to have a complete and accurate picture of your financial condition. Do not leave anything out and come up with smart plan to manage the situation you are dealing with.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. Choose an attorney versed in personal bankruptcy to make sure you don’t make mistakes.
It is important to protect your home when filing bankruptcy. Filing for bankruptcy does not mean you have to lose your home. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
Don’t file for bankruptcy if it is not completely necessary. 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 not a simple, breezy course of action that should be taken lightly. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. So, consider bankruptcy only as a last resort when you have no other choice.
After you have filed for bankruptcy, enjoy your life. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. That stress can lead to depression, if you don’t take the right steps in fighting it. Your life will see improvement after you get past the bankruptcy.
It is possible to obtain new vehicle and home loans while a Chapter 13 case remains active. There will, however, be obstacles. Before you can take out a new loan, you will have to clear it with your trustee. When you meet with your trustee or financial adviser, make sure that you come up with a sound budget proposal. Also, you need to be ready to say why you’re going to need the item.
Make sure you are completely aware of bankruptcy laws before you consider filing. For instance, you may not be aware that a filer is forbidden from transferring assets from his or her name for one full year before the petition is filed. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Even though the economy is slightly getting better, so many people do not have jobs or are not getting paid enough. Even if you do not have a steady income, there are steps you can take to prevent bankruptcy. You hopefully have more knowledge now on how you can avoid bankruptcy. Best of luck.