The economy has been in a poor state for several years now. The difficult economic circumstances have caused increasing levels of unemployment and personal debt. Debts can lead to bankruptcy, something that is very bad. For anyone who is facing the threat of bankruptcy, the advice in this article can help you deal with the situation more effectively.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. If the tax can be discharged, so can the debt. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
When you document your financial records, it is vital that you are 100% truthful in order to have a successful resolution to your bankruptcy process. 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 avoid telling your lawyer specific details with your case. Chances are that you may have forgotten to tell them about certain specifics that may be important to your filing. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Any bankruptcy consultation should be free of charge. You can meet with a few lawyers before deciding on one. Most lawyers provide a free initial consultation. Only make your decision if all your questions and concerns are adequately addressed. It is not necessary to make a final decision right away. You could even go to different lawyers for advice.
Since the majority of attorneys are willing to provide no-cost initial consultations, it is smart to meet with more than one before you make a selection. Ensure that you have a meeting with a real lawyer instead of an assistant, since they can provide the best advice. Taking the time to compare lawyers will ensure that you get a person that you can be yourself around.
Don’t file for bankruptcy unless it’s absolutely necessary. Many times a consolidation loan will ease your financial struggles. Bankruptcy cases are long, anxiety-filled experiences. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Chapter 13 Bankruptcy
Look into filing Chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. 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.
Don’t automatically assume that bankruptcy is your only option. You may qualify for alternatives such as debt repayment plans or interest rate reductions. Ask your bankruptcy attorney about these options. If you are facing foreclosure, consider a loan modification plan. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. The process of filing for bankruptcy can make people a nervous wreck. That stress can lead to depression, if you don’t take the right steps in fighting it. Once the process if over, your life will improve.
Never take big cash advances from the credit cards that you own prior to filing for bankruptcy, even though you know that the debt will be erased. This will be viewed as fraud, and you may be held responsible for the balances despite your bankruptcy filing.
If you intend to file bankruptcy soon, you may want to discontinue paying all debts. Bankruptcy laws generally don’t cover situations which occurred within a short time frame prior to filing, such as the previous 90 days worth of credit card debt. Learn the rules regarding bankruptcy before making any final financial decisions.
The economy is showing signs of recovery, but unemployment and underemployment are still high. Even if you do not have a steady income, there are steps you can take to prevent bankruptcy. Hopefully, the information in this article has provided you with useful information that can help you stay out of bankruptcy. Hopefully, you have the best luck.
