It is an unfortunate fact that the topic of bankruptcy is quite common nowadays. Most people will put all the blame on the poor economy. However, before selecting this option make sure you know everything you need to know before you head too far down the path. Read on to find insightful tips and information about bankruptcy filing.
Do not use a credit card to pay income taxes and then file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Always be honest when filling out paperwork. Lying on your filing can cause dire consequences such as: delays, penalties, being prevented from re-filing, or even jail time.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. In this event, you should attempt to apply for a secured card or two. This will show other people that you’re serious when it comes to having your credit record in order. Unsecured credit may be offered to you quicker than you think after doing so.
Try to find a bankruptcy attorney who is personally recommended, rather than off the Internet, or out of the yellow pages. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. You will no longer be liable for any money that you owe to your creditors. A Chapter 13 filing involves a repayment plan, though. Typically, you will make a partial payment against your debts over the next 60 months before the balance of the debts is lifted. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.
Before filing for bankruptcy ensure that the need is there. You may find consolidating your debt may be simpler. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. You will have trouble getting credit down the line. Because of this, you should be sure that bankruptcy is your only option before you file.
Chapter 13 bankruptcy might be a good option, so don’t overlook it. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. However, if you were to miss a payment, the court would dismiss your case right away.
As you learned from the introduction of the article, bankruptcy is growing a lot these days, especially since the economy is slowly rebuilding. If you want to know that you are doing the right thing when dealing with your bankruptcy be sure to put the information you read in this article to use.