It’s difficult for anyone to file bankruptcy, but sometimes it can be the only option. This decision may not be easy, but it is comparatively easier when you know what the process entails and how to navigate it. Read the below article for excellent advice from people who have personally went through bankruptcy.
Generally bankruptcy is filed when a person is facing insurmountable debt. If you find yourself needing to file for bankruptcy it is important to familiarize yourself with the state laws. You will find that each state has their own bankruptcy laws. You may find your home is safeguarded in one state, while in another it isn’t. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Should the tax be dischargeable, the debt is often dischargeable as well. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Credit Cards
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. A common rule is that dischargeable tax means dischargeable debt. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Be sure you’re doing what’s right before you file for bankruptcy. You have other options available like consumer credit counselling services. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Weigh all the information you can find on- and off-line to make an educated decision. Learning about bankruptcy is not simple, so call a bankruptcy attorney to make an appointment to ask questions.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. Unless there are no other options, your retirement funds should never be touched. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. Although you may find a good lawyer through an advertisement, you can simply find a much better lawyer if the lawyer is recommended to you by someone who has gone through the process and who has the inside track on the lawyer’s true capabilities.
Do not file for bankruptcy if your income is greater than your bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. When you arrive at a consultation ask plenty of questions. You should also seek free consultations from several attorneys prior to choosing one. You should make a final decision only once all of the questions or concerns are sufficiently attended to. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. So you have sufficient time to speak with a number of lawyers.
Nobody wishes to file for bankruptcy, but there are cases where it is simply necessary. Now that you have read this article, you have been exposed to some ideas, insights and advice from those who have gone down this road before. By learning from others who have been there before, it will make things a lot easier on you.