When you file for bankruptcy, it can not be described as a simple procedure. Because of the various types of claims out there, and also the different ways in which you can approach filing, your particular situation will be personal to you. It’s imperative that you learn everything you can about the process before you even think about filing. Here are a few wise tips to help you in your decision.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. When you are faced with this issue, begin to familiarize yourself with your state’s laws. The laws governing bankruptcy vary from state to state. In a few states, they see to it that your house is protected. This is not the case when it comes to other states. It is important to be cognizant of the laws in your state before filing for bankruptcy.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Personal Bankruptcy
Make certain that you comprehend everything regarding personal bankruptcy by studying online. The United States D.O.J., the A.B.I and the N.A.C.B.A. are all useful organizations willing to provide educational material. You will find that the process of filing for personal bankruptcy is easier and less of a hassle with the more information on the subject you gather ahead of time.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Should the tax be dischargeable, the debt is often dischargeable as well. Because of this, transferring the debt to your credit card is pointless.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. Avoid touching your retirement accounts whenever possible. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Credit History
Be sure you’re doing what’s right before you file for bankruptcy. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
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. Avoid touching your retirement accounts whenever possible. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Check the accuracy of all information before it is filed. Don’t assume that they’ll remember something important later without having a reminder. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Be persistent in researching information about filing for bankruptcy and consult a qualified personal bankruptcy attorney. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Interview and research attorneys before choosing one to help you with your bankruptcy.
As you can see, filing for bankruptcy is a serious decision that must be considered carefully before you make it. If you feel that bankruptcy best suits your current financial position, then ensure you retain an experienced attorney who can help you.