It is unfortunate that many people are currently facing bankruptcy. Thank you, economy! You need to educate yourself so that you can make wise decisions when it comes to filing bankruptcy. The following article will provide you with this information.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Bear this in mind; if the tax can be discharged, then the debt can be as well. Because of this, transferring the debt to your credit card is pointless.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. You can determine exactly which of your possessions are at risk by consulting this list before you file. If you are not aware of the rules, you could be setting yourself up for a lot of stress when your most important possessions are taken in the bankruptcy.
Investigate your other alternatives before you decide you have to go with bankruptcy. Many times a consolidation loan will ease your financial struggles. It is not a quick and easy process to file for bankruptcy. It will have a long-lasting effect of your future credit opportunities. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Chapter 13
Consider if Chapter 13 bankruptcy is an option. If you owe an amount under $250,000 and have a consistent income source, Chapter 13 may be right for you. When you file for Chapter 13, you can use the debt consolidation plan to repay your debts, while retaining your real estate and your personal property. That plan lasts approximately three to five years, and then you are discharged from unsecured debt. Keep in mind that even missing one payment can be enough for your whole case to get dismissed.
Don’t file bankruptcy if you can afford to pay your debts. While bankruptcy may seem like an easy way out of having to pay back all of the debt that you owe, it is a stain that will remain on your credit report for seven to ten years.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. There are many recouses available to help you lower your payments and get back on track. If you are about to lose your house, talk to your lender about 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. 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.
It is important to understand your rights when you file for bankruptcy. Do not rely on your debtors information about whether or not certain loans can be included in your bankruptcy. There are only three main classes of debts that are non-dischargable: taxes, child support and student loans. If you are speaking to debt collectors about another type of debt and they tell you it cannot be discharged, check your local regulations. You can report the collectors to your state attorney general if they are lying about this.
Make sure you are acting at the appropriate time. When it comes to filing for personal bankruptcy, timing is everything. In some cases, it is better to file immediately, while other situations benefit from trying to get certain finances in better shape before filing. Discuss your specific situation with a bankruptcy lawyer to find out when would be your best time to file.
Bankruptcy Process
Don’t let shame consume you during the bankruptcy process. The bankruptcy process can make many people feel ashamed, guilty and unworthy. These feelings do not help you and provide no value. These difficult financial times can easily take their toll on anyone. One of the best ways to cope with the situation is to maintain a positive attitude.
Gain an understanding of bankruptcy law before you file. Without knowing the exact rules, you could inadvertently run into serious issues that could ultimately lead to your bankruptcy failing. There are mistakes that may cause the dismissal of your case. Before you begin bankruptcy proceedings, research as much as you can. This will make the bankruptcy process much simpler.
Avoid making payment that might interfere with your filing. Bankruptcy rules generally outlaw repayment of creditors in the 90 days leading up to a bankruptcy filing, a period that is extended to one year when it comes to payments made to family members. So, before you ultimately decide to file a claim, be sure that you understand the rules in place.
As you read at the start of this article, bankruptcy has become a very common process now due to the economy. By following the advice presented here, you can make sound decisions in regards to your relationship with personal bankruptcy.
