Facing repossession of your valuable items, like vehicles or jewelry, can make you feel very afraid of the Internal Revenue Service. Consider your finances and put an end to creditor calls, by petitioning for personal bankruptcy. Read on to see how to get through the process.
Most people that file for bankruptcy owe a lot of money that they could not pay off. If you are in this position, you need to be familiar with the laws in your area. Every state has a separate law having to do with bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. Be sure to have some familiarity with the law in your jurisdiction.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. Generally speaking if you can discharge the tax, you can discharge the debt. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Consider all options before deciding to file for personal bankruptcy. You have other choices, including consumer credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Do not hesitate to remind your lawyer of any details regarding your case. It is wrong to assume that your lawyer will remember every word you ever utter! It’s your financial future that is in his hands; don’t hesitate to speak up.
Keep with what you have decided to do. Once bankruptcy has been filed, you may be able to regain possession of items such as electronic goods or cars that were taken away from you. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Consult with a lawyer who can advise you on what you need to do to file a petition.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
Protect your house. You don’t have to lose your home just because you are filing for bankruptcy. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Check to see if you pass the requirements necessary to file for a homestead exemption.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Unsecured Debt
You could see about filing for Chapter 13 personal bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Don’t hide from your friends and family while you go through bankruptcy. The process for bankruptcy can be brutal. It is lengthy, stressful and often leaves people feeling ashamed, unworthy and guilty. Lots of people think they need to hide from everyone until this is all done. On the other hand, isolation of a self-imposed nature can only worsen your feelings, opening the door to mental depression to join your financial depression. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.
Personal Bankruptcy
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Debts which you shared with another will not be your responsibility any longer if you file for personal bankruptcy under Chapter 7. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.
Although personal bankruptcy remains an option, look into other avenues before making the decision to pursue it. Most debt consolidation companies aren’t legitimate and will make your debt worse. Use the tips you learned from this article to improve your financial situation and stay away from debt.
