The economy is not in good shape. A poor economy means more people than ever have debt and are losing their jobs. Debts usually end in bankruptcy which isn’t good. For anyone who is facing the threat of bankruptcy, the advice in this article can help you deal with the situation more effectively.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Remember that if you can discharge the tax you can discharge the 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.
Retirement Accounts
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. You should make every effort to leave your retirement accounts untouched until your retire. Though you may have to break into your savings, keep some available for difficult times. You will be glad you did.
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If you find that to be the situation, consider requesting secured cards. They offer you the chance to demonstrate the seriousness with which you now take your financial obligations. After a while, you may be able to get unsecured credit again.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. The professional that helps you file for bankruptcy has to have a complete and accurate picture of your financial condition. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Do not give up. Many times you can get repossess property back once bankruptcy has been filed. There is a chance that you can get back your property if it has been less than ninety days since repossession. A lawyer will be able to assist you with filing the paperwork to get the items back.
Chapter 7
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 involves the elimination of all of your debt. Any debts that you owe to creditors will be wiped clean. If you choose to file for Chapter 12 bankruptcy, you’ll be put into a 60-month plan for repaying your debts before they’re eliminated. It’s important to know what differences come with every type of bankruptcy. This will let you find out what’s best for you.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Be certain you talk to the lawyer, himself, instead of a paralegal or assistant; those people aren’t allowed to give legal advice. Looking for an attorney will help you find a lawyer you feel good around.
It is possible to keep your home. Filing for bankruptcy does not always mean you will end up losing your home. 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. You are still going to want to check into homestead exemption either way just in case.
Make time to visit with family and friends during the bankruptcy process. The process for bankruptcy can be hard. It is long, stressful and makes people feel like losers. A lot of people become depressed and withdrawn until their bankruptcy is discharged. Washing yourself in self-pity will only make the situation worse and can leave you feeling very depressed. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.
Don’t file for bankruptcy the income that you get is bigger than your bills. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Think about all your options before pulling the trigger. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. Look into loan modification plans if you need to deal with an imminent foreclosure. Your creditors will be willing to work with you to allow you to pay off your debts. They may be able to take late fees off of your account, cut down your interest, or even extend the loan’s repayment period. Creditors want their money. Often, they are willing to work out repayment plans with you in order to get it.
The economy is showing signs of recovery, but unemployment and underemployment are still high. Although bankruptcy can be avoided in some cases; there are other cases where bankruptcy is the only sensible option. Hopefully, you are now aware of how to get yourself or your loved ones on the right track in order to avoid bankruptcy. Best of luck.
