It can be hard, but at times necessary, to file for bankruptcy. It is always best to go forward, armed with the best information and assistance you can find. You need to know what you are up against. Continue on for some helpful information from people who have dealt with the bankruptcy process themselves.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Remember that if you can discharge the tax you can discharge the debt. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Stay positive. There may still be way to get repossessed items back after you file for bankruptcy. There is a chance that you can get back your property if it has been less than ninety days since repossession. Consult with a lawyer who can advise you on what you need to do to file a petition.
Chapter 7
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. If Chapter 7 is what you file, your debts will get eliminated entirely. All creditor relationships will be severed. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. It’s crucial that you know the differences between all of the various kinds of bankruptcies so that you may choose the best option for your situation.
Safeguard your home. Bankruptcy filings do not necessarily mean that you have to lose your house. Depending on certain conditions, you may very well end up being able to keep your home. Additionally, some states have homestead exemptions that might let you keep your home, provided you meet certain requirements.
Do not forget to make quality time for friends and family members. Going through a bankruptcy is never easy. It can be long and drawn out which adds lots of stress and leaves people feeling empty inside. Lots of people think they need to hide from everyone until this is all done. But, isolating yourself from others could bring out more depression. Because of this, it’s vital you keep spending some time with the people you love despite what you are currently going through.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. It is possible to get your car payment lowered if you file using Chapter 7. 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.
Before filing for bankruptcy under Chapter 7, make sure that you consider the implications this will have on any of your co-debtor, who are usually family members, close friends or business associates. Speak to an attorney or read the bankruptcy laws in your state to find out if certain loans can be excluded from your filing. Although, your creditors may insist that the co-debtor pay off the entire debt.
It is possible to get an auto loan or mortgage during the repayment period for Chapter 13 bankruptcy. It’s a bit more difficult, though. You will need to go through various hoops in order to be approved for any new loan type. Draw up a budget, demonstrating that you can afford the new loan payment. It will also be necessary to show why a new purchase needs to be made.
In difficult financial situations, filing for bankruptcy is sometimes unavoidable. Now that you have read this article, you have been exposed to some ideas, insights and advice from those who have gone down this road before. Learning from others who’ve had this experience will help you learn from it as well.
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