Personal bankruptcy can always be an option for people that have had items, like vehicles, repossessed by the IRS. While bankruptcy is a big hit to your credit history, it can be the only option. To find out more about bankruptcy and what it entails, view the following article.
The primary catalyst for filing personal bankruptcy is having a large amount of debt that can’t be readily repaid. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state so it is important to do your research. Your home and other major assets may be protected in your state, while they are vulnerable in other states. Do not file before learning about the bankruptcy laws in your state.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. If the tax can be discharged, so can the debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Retirement Accounts
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Leave your retirement accounts untouched unless there is absolutely no other alternative. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
It is essential when going through bankruptcy that all of your income and assets are reported openly and honestly. You may be tempted to try to hide income and personal assets from discovery, but doing so often leads to major complications, monetary penalties and the possibility that your case will be thrown out of court.
Don’t hesitate to give your attorney a heads-up about something she has missed. Don’t assume that he’ll remember something from a month ago; tell him again. This is your bankruptcy case, so do not be afraid to remind your lawyer of any key facts.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. It is necessary to be open regarding both the positive and negative aspects of your financial life. Keeping secrets or trying to outsmart everyone is not a wise move.
Do some research about laws and legislation before filing. The laws are constantly undergoing changes, so you must stay on top of them if you are going to file for personal bankruptcy correctly. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
It is possible to keep your home. Filing bankruptcy does not necessarily mean that you will lose your house. You could keep your home; it depends on your home’s value or if a second mortgage is on your home. It can be worthwhile to understand the homestead exemption law to see if you qualify to keep living in your home under the financial threshold requirements.
Before you file for personal bankruptcy, weigh all of your options. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. If foreclosure looms, think about getting your loan plan modified. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
If you meet certain requirements, you may be able to get a lower monthly payment on your financed vehicle. Many times, payments can be lowered through Chapter 7 bankruptcy. The requirements are that your car purchase has to be greater than 910 days before filing, must have a loan that is high in interest, and must have a solid work history.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. When filing Chapter 7, you are not legally responsible for the debts in your name. Although filing for bankruptcy excludes your from financial responsibility, co-signers will still be expected to pay the loan amount in full.
Keep the concept of shame out of your head if you are contemplating bankruptcy. Feelings of low self-worth, shame and guilt are common for those who have come to the point where bankruptcy is their only option. Although dealing with a bankruptcy is stressful, try to focus on the positive. A good way to deal with bankruptcy is to make sure that you keep a stiff upper lip.
We would like to reiterate that you always have the option of filing for personal bankruptcy. Given that fact, it should be your last resort due to the consequences involved. The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.
