When in debt and filing a claim, don’t worry anymore. There is a lot of information online that can help you avoid bankruptcy. If you are ready to consider alternatives to a bankruptcy filing, the advice presented here may help.
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. Bear this in mind; if the tax can be discharged, then the debt can be as well. Because of this, transferring the debt to your credit card is pointless.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. Resisting the temptation to hide income or valuable assets from the bankruptcy trustee is a smart way to avoid potential complications, penalties, and the possibility of being barred from re-filing in the future.
Don’t hesitate to give your attorney a heads-up about something she has missed. Don’t assume that he will remember something you told him weeks ago. Be as open as you can be to make sure your bankruptcy goes as well as possible.
Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
Chapter 7
Know the differences between Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 type bankruptcy, all debts are forgiven. You will be removed from any contracts you have with your creditors. Filing Chapter 13 differs by requiring you to agree to a 60 month plan to repay your debts before they are totally eliminated. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Before filing for bankruptcy ensure that the need is there. Consider whether debt consolidation may be a more viable alternative. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. Your credit will be impacted for many years. Because of this, filing for bankruptcy should only be used as a last resort.
Investigate other alternatives before resorting to bankruptcy. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If you are about to lose your house, talk to your lender about a loan modification. Some lenders will make concessions rather than losing the money owed to bankruptcy. These concessions include waiving late fees, lowering interest rates, and changing the loan term. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
If you are concerned about keeping your car, check with your attorney about lowering the monthly payment. Lower payments can sometimes be structured into a Chapter 7 solution. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.
Don’t file for bankruptcy without knowing your rights. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Facing bankruptcy is a negative situation that can bring on stress. Working with a good bankruptcy lawyer can help make the process a lot smoother and less stressful for you. Don’t hire based solely on cost. Think about quality rather than cost when hiring an attorney. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. You might want to visit a court hearing and observe lawyers handling their cases.
File for bankruptcy before your finances get completely out of control. Lots of people turn the other shoulder towards their financial woes and hope that they’ll disappear eventually. However, you should never do this. Your debt can quickly get way too large, and as a result, you may discover that you must foreclose your home or garnish some of your wages. As soon as you’ve decided that you no longer have a handle on your debts, consult a bankruptcy lawyer to see if bankruptcy is right for you.
If you devise a plan, then you can make the situation much better. The more time you can obtain for yourself, the better off you will be. Remember to keep working towards your goal of avoiding bankruptcy. So get to it and devise a plan so that you do not have to file for bankruptcy.
