It’s hard to make the decision of filing for personal bankruptcy; however, sometimes there’s no choice. Arming yourself with valuable insights helps when filing a claim. Keep reading for tips and advice from those with personal bankruptcy experience.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Should the tax be dischargeable, the debt is often dischargeable as well. This means using a credit card is not necessary, when it will just be discharged.
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. A great way to rebuild your credit is to apply for a prepaid credit card. Having a credit card of any type will allow creditors to realize that you’re attempting to work in the right direction to repair your credit. Then, in time, it may be possible for you to obtain an unsecured credit card.
If a personal recommendation comes your way, this should be a lawyer you focus on. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Make sure that you review this list before you decide to file, to see if you can hang on to your most important possessions. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Only choose a lawyer if you feel like your questions were answered. Take your time before you decide to file after you meet with your lawyer. Take your time, and schedule consultations with more than one lawyer.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. You might not understand all of the various aspects to filing for bankruptcy. A qualified bankruptcy attorney can guide you through the filing process.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. If you owe small amounts of money, you can join a counseling program or straighten your finances out by yourself. Negotiating with creditors is another option, but creditors are notorious for “forgetting” these agreements, so get them in writing!
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Learn the benefits and drawbacks of each type before deciding which is right for you. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Be certain that bankruptcy truly is your best option. Consider whether debt consolidation may be a more viable alternative. The bankruptcy process takes forever to finish and is very nerve-wracking. It will also harm your ability to secure credit in years to come. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Interest Rates
Make sure bankruptcy is truely your only option before filing. You might be able to address your debts by arranging a repayment plan or a reduction in your interest rates. Get professional advice on these matters from a bankruptcy lawyer. A plan that can be useful when foreclosure is looming is a loan modification. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Making arrangements with the creditors to make reasonable payments towards you debt is a much better plan than bankruptcy because the lender simply wants the loan repaid.
If you decide to file for bankruptcy, it’s important that you’re educated about your rights. You might hear from your creditors that your debts cannot be canceled through bankruptcy. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If a bill collector attempts to say their bill cannot be discharged, look it up. If they are wrong, report them.
Nobody really wants to file for bankruptcy but it sometimes is just something they have to do. If you read through the information above, you’ve gathered a little bit of insight provided by other people who have had to deal with bankruptcy. Spending some time learning for others who have gone through the same thing reduce some of your stress.
