Unfortunately, bankruptcy today is something that is becoming very common. Most people cite the economy for having to file for bankruptcy. Prior to making the decision to file a petition, you need to have a thorough understanding of the topic so that you act in your own best interest. The following article will get you up to speed on all things concerning bankruptcy.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Bear this in mind; if the tax can be discharged, then the debt can be as well. This makes using a credit care irrelevant, since bankruptcy will discharge it.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Dipping into savings may need to happen, just don’t totally wipe it out, or you might not have much financial security later.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Do not give up. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. You may be able to get your property back if fewer than 90 days have passed between the repossession and are filing for bankruptcy. A lawyer will be able to assist you with filing the paperwork to get the items back.
Check into less drastic solutions prior to declaring bankruptcy. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.
Being with the people who you love should be still be a top priority. The process of bankruptcy can seem brutal. Not only is the process long, but it can be stressful, and many people feel ashamed when they do it. It is not uncommon for a person to feel the need to pull away from loved ones during the process. This is not a good idea because staying alone could cause serious problems with depression. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
Make sure bankruptcy is truely your only option before filing. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. If a foreclosure is on your horizon, look into loan modification plans. 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 want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
Take some time after filing for bankruptcy to enjoy life. So many people become stressed when they file. That stress could lead to complete depression, if you do not take the necessary steps to fight it. While the process is tough, you are getting a chance to start over.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. It’s a bit more difficult, though. Your bankruptcy custodian will need to approve the loan. Draw up a budget, demonstrating that you can afford the new loan payment. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
Do not use the word “shame”, if you go bankrupt. Filing for bankruptcy leads people to feel all sorts of emotions like shame, guilt and feeling irresponsible. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. Keep a positive state of mind to deal with your tough financial situation.
As noted in the beginning of the article, bankruptcy is a hot topic nowadays, mostly because of the state of the economy. To help you make good decisions regarding bankruptcy, consult with this article and use the knowledge to your advantage.
