Nowadays, the economy is not in very good shape. Even with a depressed economy, jobs are lost despite debts needing to be paid. Because more people are falling into debt, more people are filing for bankruptcy. This article can help you or someone you care about if bankruptcy is a consideration.
Millions of Americans file for bankruptcy each year because they can not pay their bills. If you’re in this situation, learn about the laws where you live. Each state has its own laws regarding personal bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be sure to have some familiarity with the law in your jurisdiction.
It is important that you increase your knowledge on personal bankruptcy by reviewing websites that provide reliable information. The United States DOJ, the NACBA, and the ABI all have useful information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. The rule here is that if you can get the tax discharged then you can get the debt discharged. 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.
Before undertaking the bankruptcy process, ensure you have made the correct decision. You have other options, including consumer credit counseling help. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Do not use your retirement fund or savings to pay off creditors. Unless there is no other choice a retirement account should not be used. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. If the tax has the ability to be eliminated, the debt can be too. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
While the economy is beginning to gather steam, a number of people still do not have jobs or acceptable compensation. Even if you do not have a steady paycheck, you still have options to help you avoid filing bankruptcy. Hopefully this article has provided you with some tips to keep yourself, or someone else, from having to file for bankruptcy. Take this information and apply it to your personal financial situation.