Although unhappy circumstances in your life might have led you to file for bankruptcy, your life post-bankruptcy can be much better. With a clean slate, it is possible to start over both financially and personally. Read this article to find out how to use bankruptcy for a chance at financial rebirth.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. Certain assets, as listed in the local bankruptcy regulations, are immune from seizure during bankruptcy. It is important that you read this list before filing for bankruptcy, so that can find out whether or not your most prized possessions will be seized. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
You should never give up. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. If you have been subject to a repossession during the 90 days before your filing, you stand a good change of getting your property back. Speak with a lawyer that will provide you with guidance for the entire thing.
Complex Process
When a bankruptcy is imminent, retain a lawyer immediately. Bankruptcy is a complex process, and you probably don’t know all the information that is required to navigate it. Your lawyer will make sure that the filings are correct and help you navigate the complex process of filing for bankruptcy.
Prior to choosing a bankruptcy attorney, seek a free consultation with at least three attorneys. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Before filing for bankruptcy ensure that the need is there. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy is not a simple, breezy course of action that should be taken lightly. It will affect your access to credit in the future. 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.
If you have filed for Chapter 13 bankruptcy, you will still be allowed to apply for and receive a mortgage or car loan. It is much harder. You will need to go through various hoops in order to be approved for any new loan type. To show that you are responsible and prepared for the undertaking of a new loan, flesh out a full budget. You also need to be prepared to answer questions about your need for the new item.
Don’t file for bankruptcy without knowing your rights. Do not take debt collectors at their word when they tell you that a specific debt can’t be discharged through bankruptcy. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If the debt collector tries to tell you that your debts, which do not fall into those categories, cannot be bankrupted, take a note of it, look up the debt type, and report them to your state’s attorney general office.
Make sure you are acting at the appropriate time. When you time things right, it does you good, especially when you’re filing for personal bankruptcy. Sometimes you should file immediately; however, there are times when it is better to delay until the worst has passed. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Keep the concept of shame out of your head if you are contemplating bankruptcy. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. Feelings such as these are not of value to you and it is possible for them to be psychologically harmful. Keep a positive state of mind to deal with your tough financial situation.
As you read in the beginning of this article, bankruptcy is not something anyone looks forward to. But, that does not mean that your post-bankruptcy life cannot be fantastic. Actually, your life can become much better by following the advice presented here and moving forward past bankruptcy.
