If your car or other valuable items are about to be repossessed due to back taxes, you are probably quite afraid of what will happen. Put your finances in order and file for bankruptcy if this is your only option to get out of debt. Read this article for helpful tips that will get you through this process.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. Bear this in mind; if the tax can be discharged, then the debt can be as well. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Don’t be reluctant to remind your lawyer about specific details he may not remember. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. Don’t be afraid to speak up, as it is your case and your future will be affected by its outcome.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. You can find a listing of the asset types that are excluded from bankruptcy in the Bankruptcy Code. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
Do some research about laws and legislation before filing. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. Check the website of your state’s legislation or get in contact with your local office to learn more about these important changes.
Seek a less serious option prior to filing for bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Take advantage of the opportunity to consult with a number of bankruptcy lawyers who offer the first visit at no charge. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Look for a lawyer who you can relate to.
Safeguard your most valuable asset–your home. Filing bankruptcy does not necessarily mean that you will lose your house. 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. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Do not forget to be around those you love. The process for bankruptcy can be hard. It can take a long time, take a great emotional toll and cause people to feel embarrassed and defeated. Many people tend to hide until their process is completed. Do not isolate yourself or you will put yourself at risk for depression. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.
Bankruptcy should not be filed by anyone who makes more than their bills cost. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Debt Repayment Plan
Investigate other alternatives before resorting to bankruptcy. Speak with an attorney who specializes in bankruptcy to find out if alternatives, such as a debt repayment plan or a reduction of your interest rates, might be better for you. If a foreclosure is on your horizon, look into loan modification plans. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
While filing for bankruptcy protection can be a useful option, make sure you also investigate other alternatives. You must remember that some debt consolidation services really are just a scam, and using them will result in even more debt for you. Keep the tips you read here close by and refer to them as you figure out your financial situation.
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