Drowning in debt can be overwhelming. It seems as if one little debt somehow ballooned into catastrophic debt. Getting out of debt is not easy, especially if you do not have a steady job. Read on to find tips, insight, and valuable information for clearing your debt and getting a firm grasp on your finances.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. Unless there are no other options, your retirement funds should never be touched. While dipping into your savings is likely to be necessary, avoid wiping it out completely to prevent leaving yourself with little financial security in the future.
Do not give up. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. If you have property repossessed less than ninety days prior to filing your bankruptcy, you may be able to get it back. Speak with a lawyer that will provide you with guidance for the entire thing.
You can take steps to hang onto your house. Filing for bankruptcy does not mean you have to lose your home. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. Another option is the homestead exemption that has certain income and financial requirements, but may also allow you to keep your home.
Learn what you can about Chapter 13 bankruptcies. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Remember that if you even miss one payment that’s due under this plan, the court could dismiss the whole case.
After you have finished with the initial process of filing, you can relax and take a breather. It’s not uncommon to be overwhelmed by the filing process. This stress may lead to something worse like depression, so do what you can to fight that from happening. Life will get better after you finally get this situation over with.
There are circumstances where you are able to keep your car during a bankruptcy so be sure to ask your lawyer about possibly reducing the payments. Most of the time Chapter 7 bankruptcy will allow your payments to be lowered. The car loan must have been initiated prior to 910 days before your petition. It must carry a loan with high interest. You should also have a steady history of work.
Know the rights that you have as you file for bankruptcy. Don’t take a debt collectors word for it simply because they tell you that you can’t have many or all of your debts erased by bankruptcy. Only a few debts, including child support and tax liens, are ineligible for bankruptcy. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Don’t wait until it is too late to file for bankruptcy. What a lot of people do is ignore the fact that they are in a financial crisis and think that their debt is not going to catch up to them. It doesn’t take long for debt to become unmanageable, and not taking care of it could eventually lead to wage garnishment or foreclosure. Once you realize that the debt you have is too much for you to handle, start thinking about talking to a bankruptcy attorney, they can guide you throughout the entire process.
There are certain life events that you have no control over. Hopefully, this article’s advice has shown you that there are still plenty of steps you can take to improve your situation even when bankruptcy is in the picture. Take the advice that was given and make a difference in your life.