Even people who have had assets, such as a car, seized for back tax debt can file for bankruptcy. Although bankruptcy takes a major toll on credit, sometimes, it is the only option. Continue reading this article to understand what you need to know about bankruptcy and the likely end result of going through one.
You should check with the personal bankruptcy resources available online to educate yourself thoroughly before you begin the process. The United States Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more you know, the better equipped you’ll be to make the wise decisions needed for a successful bankruptcy.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. Avoid ever touching retirement funds until you have no other choice. Your savings accounts offer valuable financial security so try to leave them intact.
The best way to build your credit up after a bankruptcy is making all your payments on time. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will prove that you want to improve your credit score. After a time, you are going to be able to have unsecured credit cards too.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. It is important that you are completely transparent, showing everything financial that needs to be known. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Spend time researching the advantages and disadvantages of filing for each one of these. If the information you read is unclear to you, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Filing for bankruptcy, and all that comes with it, can be hard to handle at times. It is long, hard and sometimes leaves people feeling guilty or ashamed. A lot of people hide away until the entire proceedings have been played out. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial 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.
Repayment Plan
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. If you are looking at foreclosure, think about a loan modification program. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. It’s easy to be stressed during this time. This stress may lead to something worse like depression, so do what you can to fight that from happening. Life is going to get better once you get through this.
Before you decide to file for Chapter 7 bankruptcy, consider how it could affect other people on your credit accounts, such as family members or business partners. When you file a Chapter 7, your debts will be dissolved. However, the creditors could come after your co-signer and demand full payment for the debt.
Make sure that you act at the appropriate time. They say timing is everything, and this rings true when filing for bankruptcy. For some debtors, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Speak with a bankruptcy lawyer about when the best time is to file for your specific needs.
We would like to reiterate that you always have the option of filing for personal bankruptcy. However, it must not be your first choice due to it causing complications on your credit. Knowing the ins and outs of bankruptcy can make the filing process easier and make it less likely that you’ll have to forfeit your property.
