If you are thinking about filing for bankruptcy, research all your options before making an informed decision. Doing your research, partially by reading articles like this one, is an important first step in filing for bankruptcy. It’s important to prepare yourself by learning ahead of time.
Do not use a credit card to pay income taxes and then file for bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. It is pointless to use credit cards if they can be discharged.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The U.S. DOJ, the NACBA, and the ABI all have useful information. The more information you have, the more confident you can be about any decision you make and you will know that you are doing the best thing possible for your situation.
If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. Retirement accounts should never be accessed unless all other options have been exhausted. 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.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Only choose a lawyer if you feel like your questions were answered. It’s isn’t necessary to make a choice right away. You could even go to different lawyers for advice.
Don’t forget to enjoy yourself during your bankruptcy. Many debtors stress-out during the time of filing. Make sure you take care of your part and let your attorney do the rest. Your life will most likely improve once you’re over this hump, so relax.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. If the tax has the ability to be eliminated, the debt can be too. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. A lot of the time you can lower payments by filing for Chapter 7 bankruptcy. You need to have bought your car 910 days before you file, have a loan with high interest and you’re also going to need a good work history.
Consider every option prior to filing for bankruptcy. Credit counseling is one option you should consider. There are various non-profit companies that may be able to help you. These companies lower your interest and payments by working with your creditors. Often, they make the payments to your creditors, and you make your payment to them.
Think before you pay debts after you’ve decided to file. Some bankruptcy rules do not allow you to send money to creditors within three months of filing; this can extend up to a full year if a loved one is involved. Study applicable regulations prior to making any financial choices.
Exhaust every other option before making the decision to file for personal bankruptcy. There are other options available, such as credit counseling for consumers. Bankruptcy can leave your credit history permanently marked. Prior to doing this you need to be sure you try everything else first to get your credit history into shape and to lessen the impact.
Don’t stress about trying to determine whether bankruptcy is something you must do. Although it may be very difficult to admit that bankruptcy is the answer for you, it will be much harder to continue spiraling into a debt quagmire. By speaking with a professional in a timely manner, you can get good advice before the bankruptcy process gets too difficult.
As you can see from the above article, bankruptcy doesn’t just happen. Many things have to be done properly. If you follow the advice given here, you’ll be able to make sure you have everything in order for when you file bankruptcy.