The economy is looking bad these days. The result of the dreadful economy is that many people are losing their jobs and falling into uncontrollable debt. The unfortunate result of this is that more and more people are filing for personal bankruptcy. If you would like to know how to get yourself or your friend out of filing for bankruptcy, read on for some possible answers.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. If the tax can be discharged, so can the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. If you find yourself in this situation, you may want to think about getting a secured card or two. This will prove that you want to improve your credit score. After some time passes they may be willing to offer you unsecured credit.
Before declaring bankruptcy, be sure you’ve weighed other options. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
Safeguard your home. Bankruptcy filings do not necessarily mean that you have to lose your house. Depending on if your home’s value has gone down or if it has a second mortgage, you might be able to keep it. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Personal Bankruptcy
Before filing bankruptcy consider every available avenue. Sometimes consolidating your existing debts can make them more manageable. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. Remember that your credit will be affected by the mark of personal bankruptcy for a long time. Personal bankruptcy should be undertaken as a last resort when no other workable options are available to you.
While going through this process, spend more time with friends and family. Bankruptcy can take a toll on you. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. A lot of people become depressed and withdrawn until their bankruptcy is discharged. But, isolating yourself from others could bring out more depression. This is the reason that you need to take the time out to spend time with everyone you love despite what your financial situation is.
Do not use the word “shame”, if you go bankrupt. This process is less that glamorous, and it makes most people lose their self-esteem. Do not let these negative feelings influence your decision. Try to keep a positive attitude during this tough time and you will be able to better cope with bankruptcy.
See to it that you are aware of the laws concerning bankruptcy before you consider filing. For instance, you need to know not to shift assets into someone else’s name in the year leading up to your filing. Also, it is against the law for a person to acquire more debt on their credit card prior to filing.
Think about other options before you file for bankruptcy. One option to consider is credit counseling. Many different non-profit entities exist that can assist you without charging you any fees. They can speak with your creditor about getting your payments and interest reduced. They collect payments from your and then pay the creditors.
Avoid making payment that might interfere with your filing. You might be legally unable to file for bankruptcy if you were still paying your creditors ninety days ago, or your family members a year ago. Learn the rules regarding bankruptcy before making any final financial decisions.
Credit Cards
Many people who have filed for bankruptcy, resolve to never use credit or credit cards again. This is not a good decision on their part because credit cards help in building good credit. If you don’t use your credit, you won’t be able to make big purchases on credit in the future. One credit card is adequate to begin rebuilding your credit rating.
Contrary to popular belief, you won’t necessarily lose your assets if you happen to file for bankruptcy. You get to keep your personal property. Things like jewelry, clothes, and electronics are included in this category. Your current state’s laws, deciding between Chapter 7 or 13, and your current financial position will determine just how much you get to keep.
Avoid Bankruptcy
The economic recovery has bypassed many people, leaving their finances in disarray. If you don’t have steady income, you might still be able to avoid bankruptcy. Hopefully you have figured out some ways to avoid bankruptcy for you or someone you know. No matter how bad things seem, there is hope for you, good luck.
