It’s never great when someone needs to file bankruptcy. The embarrassment can be overwhelming when friends discover your poor financial position. But don’t surrender; this article can be a guide to avoid bankruptcy, or to handle it more easily if you do need it.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. You can learn a lot on the U.S. Department of Justice and National Association for Consumer Bankruptcy Attorneys provide excellent information. The more knowledge you have, the more you are able to make right decisions and find a new future.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” 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.
Getting unsecured credit post-bankruptcy will likely be difficult. If this happens, instead you should turn your attention to secured credit cards. That will show lenders that you are committed to rebuilding your credit. After some time passes they may be willing to offer you unsecured credit.
Check into less drastic solutions prior to declaring bankruptcy. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Chapter 7
The two main kinds of bankruptcy are Chapter 7 and Chapter 13. Make sure you understand them so you know what is best for you. Under Chapter 7 type bankruptcy, all debts are forgiven. Any ties you have concerning creditors will definitely be dissolved. Chapter 13 is different, though. This type of bankruptcy entails an agreement to pay off your debts for five years prior to wiping the slate clean. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
It is wise to meet with several lawyers before making a final decision, take advantage of the free consultations to find one that is a good fit for you. Make sure you meet with a licensed attorney rather than a paralegal or assistant, because it is illegal for these people to give 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.
Don’t isolate yourself from family and friends. The process of bankruptcy can seem brutal. It is often overwhelming, and not quick. Some people may feel embarrassed or feel their self-esteem has taken a beating from it. Many people decide to hide away from the world until the process is over. You shouldn’t do this, though, as staying away from the world can amplify any emotional issue you are having, and they could even morph into full-blown clinical depression. It’s imperative that you spend as much time with loved ones as you can, even in the midst of your financial dilemma.
An understanding of your rights is important before filing for bankruptcy. It is not unusual for creditors to claim that their debt is not able to be discharged. There are not many debts that can not be bankrupted, student loans and child support for example. If you know that a debt can definitely be bankrupted, yet the collector still harasses you, file a report with the attorney general in your state.
Before filing for bankruptcy, you must be educated on the specifics of all bankruptcy laws. For example, it is against the law to transfer any assets from the filer to another for a year before filing. Also, the filer can not increase their debt before filing.
Don’t put off handling the research or procedures for the bankruptcy process if that is the route you’re taking. Although it may be tough to admit you are in financial trouble, the more you wait the higher the debt becomes. When you talk to someone professional in a timely manner, you will be able to get advice on what you can do prior to it getting too complicated.
You should acquire a bankruptcy lawyer when filing for bankruptcy. A good lawyer can properly advise you about the necessity of following through, simply a complicated process for you, and represent you when you need to go to court. You lawyer can also help you fill out and file paperwork and answer all your questions.
Just because you got alternative employment just prior to filing should not make a difference to your plans. Bankruptcy may still be right for you. The timing of your bankruptcy is a big deal. If you can file for bankruptcy before receiving additional income, this extra money won’t count against you.
As this solid advice demonstrates, there are other options besides bankruptcy. What you’ve learned from this article can put you on a corrective path, use it wisely. Use the information you have learned here, and see how you can revamp your finances and protect your valuable credit history.
