Filing for bankruptcy is not a fun thing to do. The need to file for bankruptcy is usually the result of misfortune. The process can be embarrassing and can cause a person to feel secretive when it comes to finance. You do not necessarily need to file for bankruptcy, there are other options to help you resolve your debt. This article will help you improve your financial situation.
Do not use a credit card to pay income taxes and then file for bankruptcy. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Be certain to gain a thorough understanding of personal bankruptcy by using online resources. The United States The Department of Justice is just one resource of information available to you. The more you know, the better prepared you will be to make the best decisions and ensure that your bankruptcy goes smoothly.
Don’t be afraid to remind your lawyer about important aspects of your case. Lawyers are people too, and sometimes they forget important information and need to be reminded. This is your future in their hands, so don’t be scared to mention it.
If a personal recommendation comes your way, this should be a lawyer you focus on. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
Determine which assets won’t be seized before filing for bankruptcy. The Bankruptcy Code lists assets considered exempt from being affected by bankruptcy. It is important to be aware of this list so you will know what assets are saved. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Be completely honest whenever you file for personal bankruptcy. Hiding any asset or liability is a risk that will bite you in the end. Whoever provides your legal consultation must be privy to all of your financial information. Do not hold back anything, and form a sound plan to make peace with your reality.
Chapter 13
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. This includes creditors and your relationship with them will become no longer existent. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Retirement accounts should never be accessed unless all other options have been exhausted. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Before picking a bankruptcy lawyer, speak with more than one, since most offer a consultation for free. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
Don’t be tempted to race toward a bankruptcy without taking time to make sure it is the right thing for you to do. Maybe you can just consolidate debt to make it simpler to deal with. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. It will affect your access to credit in the future. Therefore, before you file for bankruptcy you need to consider all of your alternatives.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Expect to make payments for up to 5 years before your unsecured debts are discharged. Keep in mind that missed payments will trigger dismissal of your case.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. The lawyer representing you when you file needs to have full knowledge of your financial situation. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
As you have learned, bankruptcy can be avoided. Use the tips you just read to make the best decision possible. Use the tips and advice you’ve learned here to change your habits and thereby change your financial future for the better.