You may feel quite frightened of the IRS if they threaten to repossess the things that are important to you, such as your jewelry or your car. When your debt situation gets serious enough, you may want to consider personal bankruptcy as a way to save yourself. This article will provide you with information to help you through this rough time.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Each state has its own laws regarding personal bankruptcy. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Become acquainted with local bankruptcy laws before filing.
Credit Cards
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. A common rule is that dischargeable tax means 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.
Do not use your retirement fund or savings to pay off creditors. Retirement funds should be avoided at all costs. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.
It is essential that you are honest and forthright in the documentation you provide for your bankruptcy filings. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
If you can, get a word-of-mouth referral for a lawyer. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. It is important that you are completely transparent, showing everything financial that needs to be known. Lay everything out on the table so that you and your lawyer can devise a plan to get you out of this mess.
Learn of new laws prior to deciding to file for bankruptcy. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Talk to the lawyer and not his assistant, who may not be legally able to help you. Considering several different lawyers can help find someone to trust.
Repayment Plan
Look at all the alternatives to bankruptcy before filing. Ask a bankruptcy lawyer if a debt repayment plan or rate reduction would be of benefit. If you are about to lose your house, talk to your lender about a loan modification. Sometimes your lender will work with you to help pay off your debt by giving you a lower interest rate, forgiving late fees, or extending the time period of your loan. Above all else, what creditors want is to get their money. Sometimes they would rather settle for a repayment plan instead of a debtor who is bankrupt.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. In many cases, Chapter 7 bankruptcy can lower your payments. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.
Make sure you consider implications of bankruptcy before filing for Chapter 7. Debts that involved a co-signer can be discharged in Chapter 7 bankruptcy. Your creditors can then come after your co-debtor for full repayment of the debt.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. There will, however, be obstacles. Your trustee must approve any new loans such as this. You will need to come up with a budget and show that this new loan payment schedule is doable. You will always have to let them know why this item needs to be purchased.
You should never feel shame for needing to file for bankruptcy. The bankruptcy process can make many people feel ashamed, guilty and unworthy. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. If you want to cope with your bankruptcy filing successfully, you must maintain a positive point of view.
Filing for personal bankruptcy is an option, but use it as a last resort after exploring all of your other options. Keep in mind that services that promise debt consolidation are usually scams that make your financial problems worse. Keep the advice you read in mind so that you’re able to make smart choices and stay out of debt in the future.
