If bankruptcy is looming over your head, it’s time to stop worrying and get proactive. Due to the Internet, there are all kinds of tips on how you can avoid bankruptcy. Peruse this article and pick up some tips on how to prevent a financial catastrophe that causes you to go bankrupt.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. 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. The rule here is that if you can get the tax discharged then you can get the debt discharged. Because of this, transferring the debt to your credit card is pointless.
Be certain to gain a thorough understanding of personal bankruptcy by using online resources. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The greater your body of knowledge, the better prepared you will be to make the decision of whether or not to file and to make certain that if you do file, the process is a smooth one.
If you are faced with the choice of filing for bankruptcy or using your emergency fund or retirement accounts to pay creditors, opt to file for bankruptcy. No matter what you do, do not touch your personal savings unless there is no other option. 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.
Credit Card
The best way to build your credit up after a bankruptcy is making all your payments on time. If so, apply for a secured credit card. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. Unsecured credit may be offered to you quicker than you think after doing so.
After filing for bankruptcy, you could have trouble acquiring unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will show people that you are serious about getting your credit record back in order. After a certain time, you will then be able to acquire credit cards that are unsecured.
Instead of relying on random selections from the phone book or Internet, ask around and get personal recommendations. 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,
Find out what you exemptions are prior to filing bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. This will ensure that you do not have any surprises once you have filed bankruptcy.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. Meet with the actual lawyer, not a paralegal or assistant, as they’re not allowed to give out legal advice. Searching for the best lawyer will help you located the comfort you need during this time.
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 many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
Chapter 13
Consider Chapter 13 bankruptcy. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Be around family as much as possible. The bankruptcy process can be brutal. It’s generally stressful, lengthy and can make people feel guilty, ashamed, and unworthy. It can be hard to face the world while the bankruptcy process is taking place. This is not recommended because you will only feel bad and this may cause you to feel depressed. Spend time with your family, talk about your problems and find things that relax you.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Most attorneys offer a free consultation which you should take advantage of. Meet with a few before finalizing your plans. Make your decision after all of your questions have been answered. There is no need to offer an immediate hire, so take your time. Consulting with several attorneys will also help you find someone you trust.
See if your attorney can help you lower your payments if you want to keep your vehicle. Sometimes, as part of the bankruptcy filing, your auto loan can be restructured so that you pay less each month. There are qualifications, such as the loan being high interest and a good work record for this option.
Financial Situation
Do not put off filing for bankruptcy. For some people, they tend to ignore their poor financial situation and just wishing it away, but that is only putting you in more danger. If debts are not dealt with quickly, things can quickly get out of control. Not only will you be faced with late fees and interest, but you may also be faced with a wage garnishment or foreclosure if you ignore your financial woes. Once you are aware that your financial situation is not manageable any more, your best bet is to speak with a bankruptcy attorney and find out what he or she recommends.
Be sure to enlist the help of a lawyer if you’re going to be filing for bankruptcy. It is difficult to make all of the necessary decisions yourself, and expert guidance will be helpful. A specialized bankruptcy lawyer can ensure that you are handling your bankruptcy filing the right way.
Consider all available options before deciding to file for personal bankruptcy. Credit counseling is one option you should consider. Many different non-profit entities exist that can assist you without charging you any fees. They will make arrangements with your creditors so you will have lower payments as well as lower interest rates. They act as intermediaries between you and your creditors; you pay the counselors and they pay the companies to which you owe money.
If you’re willing to learn and exercise patience and understanding in the process, filing bankruptcy doesn’t have to be a difficult process. Take the time you need to plan properly. Doing so can help you avoid bankruptcy. Get your plan together today, and start working towards a better financial future.