Filing for personal bankruptcy protection is an important strategy for people that have had assets, such as their vehicle, seized by the IRS. Although bankruptcy tends to destroy a person’s credit, it’s occasionally the only available option. Before filing, be sure that you read and understand the article full of tips below.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. A common rule is that dischargeable tax means dischargeable debt. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If you’re in this position, it is a good thing to familiarize yourself with the laws that apply in your area. Each state has its own set of rules regarding bankruptcy. For example, the personal home is exempt from being touched in some states, but not in others. You should be familiar with the laws for your state before filing for bankruptcy.
Check the accuracy of all information before it is filed. Don’t assume that he’ll remember something from a month ago; tell him again. Your case and future are affected by the attorney’s action, so never be afraid to communicate.
Do not attempt to conceal any assets when filing for bankruptcy because you may be penalized when they are discovered. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Keeping secrets or trying to outsmart everyone is not a wise move.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Most attorneys offer free initial consultations, and you should take advantage of the chance to interview multiple practitioners. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. You don’t need to decide what to do right away. So, this gives you plenty of time to consult with several attorneys.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. You should not use your retirement savings unless the situation calls for it. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Bankruptcy is tricky and hiring a good lawyer will be a must. You might not understand all of the various aspects to filing for bankruptcy. A bankruptcy attorney can advise you on how proceed properly.
As stated previously in this guide, personal bankruptcy can always be an option. It should be said that all other avenues should be explored before damaging your credit with a bankruptcy. Knowing the ins and outs of the bankruptcy process will save you from stress that will arise if you miss something down the line.