Being severely in debt is a terrifying experience. Once you realize you have to handle the problem, solutions may be difficult to find. The following article will give you some pointers on what to do regarding bankruptcy if your burden becomes to much to bear.
Think twice if you have struck upon the idea of paying off your taxes by credit card and subsequently filing for personal bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
You can find services like counseling for credit counselling services. Bankruptcy stays on your credit for a whole decade, so before you make such a big decision, to help try and limit the damage to your credit.
Avoid ever touching retirement accounts whenever possible. While you may have to use a part of your savings, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. Without reading the list, you may be shocked at which possessions can be taken from you.
Always be honest when it comes to your bankruptcy petition.
Unsecured Credit
Do not abandon hope. When you file for personal bankruptcy, you may even be able to retrieve personal property that has been repossessed. For example you may be able to get your car, electronics and even jewelry returned to you. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Consult with a lawyer who can help you along with filing the petition.
You might find it difficult to obtain an unsecured credit card or line after a bankruptcy. If you find yourself in this situation, apply for a secured card or two. This will show people that you view rebuilding your credit rating. After a certain time, you may be able to get unsecured credit again.
When looking for a lawyer to handle your bankruptcy claim, 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 plenty of companies who know how to take advantage of people who seem desperate, so you must ascertain that your attorney can be trusted.
A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Ensure that your meeting is actually with the attorney, not with a paralegal or an assistant. People in these positions are unable to offer legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Chapter 7
Be certain that you know how Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debts for good. All the people you owe money to will disappear. Chapter 13 bankruptcy allows for a payment plan to eliminate all your debts.
Consider Chapter 13 bankruptcy for your filing. Chapter 13 bankruptcy is a good choice for people whose unsecured debts amount to lower than $250,000 and who receive a regular income. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
In order for this to be considered, you must have bought your car in excess of 910 days before filing, you need a solid work history and the car should have been bought 910 days or more prior to you filing.
It is possible to obtain new vehicle and home loans while a Chapter 13 bankruptcy. You need to contact your trustee so you can get approved for this new loan. You need to show them why and prove that you can handle paying back the new loan payments. You will always have a good reason why you need the item.
Do not forget to enjoy life a little once you get through the initial filing process. It’s easy to be stressed during this time. Depression can ensue from the stress if action isn’t taken. Life will get better after you finally get this situation over with.
Know the rights when filing for bankruptcy. Some bill collectors will try to tell you that your debt with them can not be bankrupted. There are a few debts that cannot be cleared, such as student loans and child support, that can’t be bankrupted. If your creditors are telling you any other kind of debts cannot be cancelled, check the bankruptcy laws in your state or consult an attorney.
For example, you need to know not to shift assets into someone else’s name in the year leading up to your filing.
Bankruptcy should not be put off until the very last second. What a lot of people do is ignore the fact that they are in a financial crisis and think that their debt is not going to catch up to them. If you have failed to make payments for several months but have continued making purchases on credit, your petition may be denied. When you find that you cannot take care of your debts anymore speak with an attorney for bankruptcy to talk things over.
Debts that you neglect to include in your paperwork will not be addressed during the bankruptcy proceedings.
No matter how bad things are when you are filing for bankruptcy, make sure you tell the truth about your situation. One very important point is to never lie or withhold details regarding your personal assets and assets. You may go to prison time for lying about assets or debt.
Before you decide to file a bankruptcy claim, you need to first come to realization that it’s time to start living a more financially responsible life. Do not increase current debt or incur new debt prior to bankruptcy. Judges may take into account your current credit history, in addition to your past credit history, when considering your bankruptcy case. Your present handling of your finances will show that you are doing your best to change bad habits.
Sometimes you get overwhelmed with life and you feel as if there’s nothing that you can do about it. Use what you learned from this article to regain control of your financial situation. Use what you’ve learned here to give yourself a second chance.