It’s hard to make the decision of filing for personal bankruptcy; however, sometimes there’s no choice. You should only enter into bankruptcy if you possess a great deal of knowledge and understanding of the process that is to come. This article contains information that has been gathered from others who have successfully navigated the bankruptcy process.
Credit History
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Before you file for bankruptcy, carefully consider if it is the right option for you. You have other options, including consumer credit counseling help. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Hire a lawyer if you plan on filing for bankruptcy. You may not know everything you need to know in order to have a successful outcome of your case. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
Be sure your home is well protected. Filing for bankruptcy does not guarantee that you will lose your house. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. If you meet certain criteria, you may be able to retain ownership of your home even after filing for bankruptcy.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. You should make every effort to leave your retirement accounts untouched until your retire. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Be sure you go on the Internet and do your research to see what’s best for you. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Spending time with the people you love is something you should do now. Bankruptcy proceedings can be extremely harsh. It takes a long time, it can be stressful, and people feel unworthy, guilty and ashamed. It can be hard to face the world while the bankruptcy process is taking place. However, becoming a hermit will only increase feelings of self-doubt and could make you depressed. It’s crucial to spend time with loved ones despite your present financial situation.
If you are making more money than you owe, bankruptcy should not even be an option. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. Bankruptcy exemptions are properties may not be seized during bankruptcy. Be sure that you study this list. Make yourself aware of any assets you have that could be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
After you have filed for bankruptcy, enjoy your life. It is common for people to stress when filing. Stress easily leads to depression, if you are not maintaining control of your emotions. You are getting a fresh start, and things will get better.
Talk to an attorney about reducing your car payments so that you can keep your vehicle. Filing under Chapter 7 is usually a good way to lower your payments. For instance, you can get lower payments on you car if you purchased it before filing and took a loan with high interests on it.
During a Chapter 13 bankruptcy, you may still be able to get a mortgage or car loan. Of course, it’s difficult. Your trustee must approve any new loans. You will need to come up with a budget and show that this new loan payment schedule is doable. It will also be necessary to show why a new purchase needs to be made.
Don’t give up. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Consult with a lawyer who can help you along with filing the petition.
Timing is everything. When it comes to filing for personal bankruptcy, timing is everything. Sometimes it is the best option to file quickly, whereas in other situations filing should be put off until the worst has already passed. The professional advice of a bankruptcy lawyer can help you pin down the best time to file given your current financial state.
Nobody really wants to file for bankruptcy but it sometimes is just something they have to do. Having read the preceding piece, you now possess critical insight and knowledge offered by those with actual prior bankruptcy experience. You will feel more relaxed about your own path when you learn from people who traveled it before you did.