Bankruptcy is a difficult decision for anyone to make; however, it is sometimes necessary. It is best to go into this kind of thing when you know what going on and how to go about doing it. Ahead, you will find information from others like yourself, who have struggled with bankruptcy and its effects.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. Look into other options, such as consumer credit counseling. Bankruptcy has a negative effect on your credit reports, in that it is permanently there. Before you take this step, make sure all your options have been considered.
If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.
Don’t file for bankruptcy unless it’s absolutely necessary. Maybe you can just consolidate debt to make it simpler to deal with. Bankruptcy is a stressful process. It will have a major effect on your credit as time goes on. Therefore, you must make sure that there is no other option that you could take before you file for bankruptcy.
Chapter 13 Bankruptcy
Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Consider that if you even miss one payment, your case will not be considered by the court.
Think about all the choices available to you when you file for bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. Loan modification plans on home loans are a great example of this. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. When push comes to shove, creditors want their money, and they are willing to make concessions to get it and prevent the debtor from declaring bankruptcy.
Once your bankruptcy filing is under way, take the time to decompress a little. The filing process is extremely stressful for a lot of the people who go through it. This stress may lead to something worse like depression, so do what you can to fight that from happening. Things will be sunnier after you take positive steps to move forward.
See if your attorney can help you lower your payments if you want to keep your vehicle. You can often lower your payment using Chapter 7 bankruptcy. In order for this to be considered, your car loan must be one with high interest, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
Exhaust all other option prior to filing personal bankruptcy. For example, you may want to think about credit counseling. There are many different non-profit companies that can help you. They’ll talk to creditors and strive to get both your payments and interest rates lowered. Your payments are made to the organization and they repay the creditors.
Don’t take large cash advances from credit cards prior to filing since the debts will be eliminated from these cards. To do this would be considered fraud. Even after filing for bankruptcy, you might be forced to repay money gained in this manner.
Realize that bankruptcy may be better for you when it comes to your credit. Continuing to miss your payments can be really bad on your debt. While bankruptcy will haunt your credit history for up to ten years, your damaged credit will start healing right away. One of the benefits of bankruptcy is a relatively fresh start.
Your filing should include all debts and creditors you need to eliminate. If you forget to include any of your debts in the filing, you lose the chance to discharge them. It’s your responsibility to ensure everything is written down to avoid getting charged for debts that can be discharged.
Don’t slow down any filing plans before starting a new job. Filing for bankruptcy might be the smartest thing for you to do. The timing of your bankruptcy is a big deal. If you get your filing posted before you start gaining new income, your means of repayment will be evaluated without taking it into account.
Nobody wishes to file for bankruptcy, but there are cases where it is simply necessary. Having read the preceding piece, you now possess critical insight and knowledge offered by those with actual prior bankruptcy experience. By learning from others that have been in the same situation, it will make it easier on you in the long run.