Carrying too much debt is a problem a lot of people are dealing with now. The bills keep adding up and it is never a friendly voice on the other line when the phone rings. If this is your story, then personal bankruptcy may be for you. Keep reading to see if this is a viable solution for you.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Remember that if you can discharge the tax you can discharge the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Make certain that you comprehend everything regarding personal bankruptcy by studying online. You can learn a lot on the U.S. Department of Justice, the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys, all provide valuable information. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
As filing bankruptcy becomes more of a reality, don’t use your entire savings or your retirement funds to pay creditors or attempt to resolve insolvency. Retirement accounts should never be touched if it can be helped. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
When choosing a bankruptcy lawyer, your best option is to find someone who is recommended by someone you know versus someone who you find online or in the phone book. There are various companies that prey on the financially desperate, so you need to find someone you can trust to ensure the process goes smoothly,
Any bankruptcy consultation should be free of charge. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Choose to file only if your lawyer has convinced you that this is the best decision. You need not decide right away. You can take your time and check out several attorneys before making your final selection.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Look into other options, such as consumer credit counseling. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Make certain that you comprehend the differences between Chapters 7 and 13. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. All happenings with creditors will disappear. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Just be sure that the person you speak with really is the lawyer, rather than a paralegal, since they cannot legally give advice. Comparing different lawyers makes it possible to find one with whom you work well.
Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
Consider filing using chapter 13 bankruptcy. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. You can secure your home under Chapter 13 and pay your debts with a payment plan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Consider that if you even miss one payment, your case will not be considered by the court.
Make time to visit with family and friends during the bankruptcy process. Filing for bankruptcy, and all that comes with it, can be hard to handle at times. It takes time and a lot of people feel stressed and ashamed throughout this procedure. Lots of people choose to disappear for a while until the entire process is over and done with. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. For this reason, if you are undergoing personal bankruptcy proceedings, you must continue to live a normal life, spending time with your friends and relations.
Clearly, significant resources and assistance can be had by anyone contemplating personal bankruptcy. Tackling this in a logical and emotionless manner will relieve you of your debt issues while giving you a fresh start for the future.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Put everything out on the table and craft a wise plan for handling the situation the best you can.