It can be hard to file bankruptcy. If you are thousands of dollars in debt, you may not have many options. Even if you have poor credit, there’s still lots one can do to obtain a loan, but you need to keep reading to learn how.
Have a good look around the Internet to see what information is relevant to you regarding bankruptcy. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more you know, the more you’ll knwo that you’ve made a wise decision and the you’re making sure your bankruptcy goes as smooth as possible.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Remember that if you can discharge the tax you can discharge the 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.
It is possible to keep your home. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Chapter 13 Bankruptcy
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
Look into filing Chapter 13 bankruptcy. With a consistent income source and less than $250k in debt, try filing for Chapter 13. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. There are extra hoops to jump through. You will need to secure the trustee’s approval for any new debt obligation. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. They may also want to know why you believe you need the loan.
In time you will leave the effects of bankruptcy behind you and resume your normal life. Through the saving of money and striving to reestablish your credit, creditors will take this to heart. Start saving to see just how much of an impact the change makes when people see you go for a home or car loan.
Be sure to remind your lawyer if it seems that some details of your situation are forgotten. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. 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.