There are many different reasons why the debt could have piled up on you and became overwhelming. What’s important now isn’t how it happened but rather what you intend on doing in order to handle it. Bankruptcy is all about giving you a fresh start. The article you’re about to read contains great information on bankruptcy and how you can proceed with filing a claim.
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. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Every state has a separate law having to do with bankruptcy. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Become acquainted with local bankruptcy laws before filing.
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. Do not tap retirement accounts unless there is no other alternative. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
Unsecured Credit
After filing for bankruptcy, you could have trouble acquiring unsecured credit. If this happens to you, think about applying for a couple of secured credit cards. By doing this, you will be letting people know that you want to fix your credit score. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Determine which of assets are safe from seizure and which are not before filing for personal bankruptcy. To find an itemized list detailing assets exempt from bankruptcy, find the Bankruptcy Code. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
You must be absolutely honest when filing for personal bankruptcy. If you try to hide any of your information, it will eventually surface and cause you problems. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Do not hold back anything, and form a sound plan to make peace with your reality.
Find a specialized lawyer if you are thinking about filing for bankruptcy. Personal bankruptcy is quite complex, and it is entirely possible that you will not be able to familiarize yourself with all the laws and processes. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Do not hesitate to remind your lawyer of any details regarding your case. Just because you have told him something of importance that he will remember it. This is your bankruptcy and your future, so never be nervous about speaking your mind.
Don’t be tempted to race toward a bankruptcy without taking time to make sure it is the right thing for you to do. You may find consolidating your debt may be simpler. Declaring bankruptcy is a very involved process that can cause a good deal of anxiety. The future of your credit will be greatly affected. Because of this, filing for bankruptcy should only be used as a last resort.
Do not forget to make quality time for friends and family members. Going through bankruptcy is difficult. At the end of the process, many people are left with feelings of shame and worthlessness. Lots of people choose to disappear for a while until the entire process is over and done with. Isolating yourself from your loved ones can lead to feelings of depression. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
Interest Rates
After a bankruptcy, you may still see problems getting any kind of unsecured credit. If you find that to be the situation, consider requesting secured cards. That will show lenders that you are committed to rebuilding your credit. After a time, you are going to be able to have unsecured credit cards too.
Consider all options before filing for bankruptcy. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. You can apply for a modification of your mortgage if your home is going into foreclosure. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, it can be more difficult. You will need to secure the trustee’s approval for any new debt obligation. You need to develop a budget and show that you will be able to afford the new payment. You should also be prepared to explain why you need to purchase the item.
Look at bankruptcy as a chance to mature and take responsibility for your personal finances. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. Do not let these negative feelings influence your decision. Keep your mindset positive while you work through financial troubles such as bankruptcy to reduce stress and have an easier time coping.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Penalties may include fines, imprisonment or denial of the filing. Put everything out on the table and craft a wise plan for handling the situation the best you can.
Bankruptcy will erase debts. Don’t create any new debts before filing for it. This is fraud, and you will be required to pay that money back.
Be cautious if you are planning to pay off any of your debts before you file for bankruptcy. There are many laws when it comes to bankruptcy, including prohibition of paying some creditors 90 days before you file, as well as family for a whole year. Know the laws prior to deciding what you are going to do.
As stated earlier, anything that leads someone to bankruptcy is not a good story. However, the story that gets written after bankruptcy does not have to be depressing too. Actually, your life can become much better by following the advice presented here and moving forward past bankruptcy.
Do not despair, as it’s not the end of the world. Bankruptcy might help you get back things you thought you’d lost and had repossessed, such as electronics, vehicles and jewelry. If it has been fewer than 90 days since you filed for bankruptcy, it is possible for you to get repossessed property back. Interview and research attorneys before choosing one to help you with your bankruptcy.