Deciding to file for bankruptcy is serious and should be looked at seriously. Read the suggestions below to learn what you should expect, and the steps you will need to take as you think through this decision. Learn everything you can prior to doing anything.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If you are in this position, you need to be familiar with the laws in your area. Every state is different when it comes to dealing with bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. Because of this, transferring the debt to your credit card is pointless.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. 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. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Unless there is no other choice a retirement account should not be used. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
Do not be afraid to remind your attorney of important specifics of your case. It is wrong to assume that your lawyer will remember every word you ever utter! This is your bankruptcy and your future, so never be nervous about speaking your mind.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. Don’t touch retirement accounts unless you don’t have a choice. Your savings accounts offer valuable financial security so try to leave them intact.
Bankruptcy is not a something that simply happens, as this article has proven to you. Many steps have to be taken, and all of them must be performed properly. If you apply the tips above, it is possible to be certain that your case is handled cleanly and thoroughly.