Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. While bankruptcy is a big hit to your credit history, it can be the only option. Read this guide in order to know more when it comes to filing bankruptcy as well as the consequences of doing so.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If this is happening to you, then learn about the laws where you live. Different states use different laws when it comes to bankruptcy. Some states protect your home, and others do not. Do not file before learning about the bankruptcy laws in your state.
Retirement Accounts
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Avoid touching your retirement accounts whenever possible. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code contains a list of various assets that are excluded from bankruptcy. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. You wouldn’t want to unexpectedly lose any possessions you treasure.
Don’t throw in the towel. There may still be way to get repossessed items back after you file for bankruptcy. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Interview and research attorneys before choosing one to help you with your bankruptcy.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Choose to file only if your lawyer has convinced you that this is the best decision. You don’t need to decide what to do right away. Consulting with several attorneys will also help you find someone you trust.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. These kinds of laws are constantly changing and it is important that you are aware of these changes, so that you can learn how to properly file for bankruptcy. To know what these changes are, go to your state’s website or contact the legislative offices.
Chapter 7
Be sure you know how Chapter 7 and Chapter 13 differ. The Chapter 7 variety can help you eliminate your debts almost entirely. The ties with the creditor will be broken. With a Chapter 13 bankruptcy, you will have to make payments for 5 years before the debts are forgiven. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. Spend time researching the advantages and disadvantages of filing for each one of these. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Be sure that bankruptcy really is your best option. Consolidating current debt could make it easier to manage. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. It will certainly affect the credit rating that you have in the future. This is why you must ensure that bankruptcy is the only option left for you.
If you are concerned about keeping your car, check with your attorney about lowering the monthly payment. Filing for Chapter 7 can help to lower your monthly payments on possessions such as your vehicle, helping to ease your financial load. For instance, you can get lower payments on you car if you purchased it before filing and took a loan with high interests on it.
Even if you are involved with Chapter 13 bankruptcy, it is still possible to get a mortgage or an automobile loan. However, there are steps which must be taken to ensure you are within the law of bankruptcy. Your trustee can help you acquire a new loan. Draw a budget up and show how you can pay the newer loan payment. Be ready to justify the purchase that you need the loan for, too.
As mentioned earlier, there is always the opportunity to file for personal bankruptcy. However, it should not be anyone’s first choice because it does not reflect well on credit. The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.
