Bankruptcy can be stressful and it can also bring relief. On one hand, having people go through all of your personal financial information can be formidable. Bankruptcy has a positive outcome since the collection calls will stop. Continue reading to learn what you need to know to make your bankruptcy almost painless.
Lots of people have to claim bankruptcy when their bills are larger than their income. Study the laws in you state to learn what you need to do and what your options are. You will find that each state has their own bankruptcy laws. In some states, your home is protected, while in others it is not. Be sure to have some familiarity with the law in your jurisdiction.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Credit Cards
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. If the tax can be discharged, so can the debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
If a personal recommendation comes your way, this should be a lawyer you focus on. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
Be sure your home is well protected. Bankruptcy filings don’t necessarily have to end in the loss of your home. It is entirely possible that you will be able to keep your home. This is dependent upon the your home’s value and whether or not you have taken a second mortgage. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. It is crucial to read the list before you file for bankruptcy so you know whether your favorite items will be taken. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
There are many pluses and minuses to filing bankruptcy. Doing some research is the best way to choose the most adapted solution. The advice in this article will help you to deal with bankruptcy successfully. Utilize these tips and let them guide you towards a stress-free financial future.