Bankruptcy will always be a stressful event in a person’s life. Do not let your emotions get the best of you, you can clear up your life and stop worrying as much. They think they are stuck, but they really aren’t, and neither are you, thanks to the following tips.
Generally bankruptcy is filed when a person is facing insurmountable debt. If this applies to you, be sure that you know what the laws of your state are. Each state has its own set of rules regarding bankruptcy. For instance, your home might be protected in some states while you might lose it in others. Familiarize yourself with the bankruptcy laws of your state prior to filing.
Credit Card
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. This means using a credit card is not necessary, when it will just be discharged.
After a bankruptcy, you may not be able to receive any credit cards. If this happens, instead you should turn your attention to secured credit cards. This will show people that you are serious about getting your credit record back in order. Unsecured credit may be offered to you quicker than you think after doing so.
Before declaring bankruptcy, ensure that all other options have been considered. For example, consumer credit counseling programs can help if your debt isn’t too large. It is sometimes possible to negotiate smaller payment by yourself. If you do this, make sure you save a written record of debt modifications that are negotiated.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.
Filing for bankruptcy is not recommended when you have income more than your debts. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
Do not forget to enjoy life a little once you get through the initial filing process. Many people feel a lot of stress while they work through the bankruptcy process. That stress can lead to depression, if you don’t take the right steps in fighting it. Once the process is complete your life will improve.
Before going through the Chapter 7 filing process, ensure that your co-debtors are abreast of any implications relating to this process. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. However, your creditors will be able demand that your co-debtor pays the debt off in full.
Be aware of the fact that you may be under a great of stress while you deal with your bankruptcy. To combat these problems, look into securing a good lawyer. Don’t allow cost to determine who you hire. While the person you select does not have to cost the most, they should be competent and reliable. Make sure that you verify their reputation through various sources including people in your circle of friends and the BBB. If you wish, you can attend a bankruptcy hearing and witness your attorney in action.
Know that ultimately, bankruptcy could get you a higher credit score than to keep making late payments or missing payments altogether. Of course, bankruptcy hurts your credit for up to ten years, but you can begin to re-build your credit immediately. Getting a fresh start is one benefit of bankruptcy.
After reading this article, hopefully you now know that bankruptcy does not have to mean doom and gloom. Going through bankruptcy will be hard at first, but it can also be worth it. Using these tips will allow you to get through this process with ease.
