Is Personal Bankruptcy The Right Choice For Me?

Filing for bankruptcy is still an option for anyone who has had possessions repossessed by the IRS. While bankruptcy is a big hit to your credit history, it can be the only option. To find out more about bankruptcy and what it entails, view the following article.

Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If this sounds familiar, you should read up on the bankruptcy laws in your state. Bankruptcy laws vary from state to state so it is important to do your research. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. You should be aware of local bankruptcy laws before filing.

Don’t use a credit card to pay off your taxes before filing for bankruptcy. 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. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.

Credit History

Ask yourself if filing for bankruptcy is truly your best option. There are other options available, such as credit counseling for consumers. Bankruptcy is a serious negative on your credit history so make sure you have no other options before you file. It is important to keep your credit history as positive as possible.

Be sure to weigh all of your options before deciding to file for personal bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.

If you are in the midst of a Chapter 13 bankruptcy, it is possible to apply for certain loans. This is harder. Your bankruptcy custodian will need to approve the loan. To show that you are responsible and prepared for the undertaking of a new loan, flesh out a full budget. You will need to be able to explain why the purchase is necessary.

Do a little bit of research into the regulations having to do with filing for bankruptcy before you begin the process. If you do not file for bankruptcy properly, you might run into a lot of different issues. If you do not know bankruptcy law, your bankruptcy case could be dismissed. Before you begin bankruptcy proceedings, research as much as you can. This will ensure your bankruptcy will go smoothly.

Bankruptcy Filing

Exercise some caution in repaying your debts when you know a bankruptcy filing in your future. 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. Read the rules before making financial decisions.

Select a bankruptcy attorney wisely. There are a large number of less than credible bankruptcy lawyers out there. Check your lawyer’s credentials! Be sure he or she is experienced and has the correct licensing. Be sure to look them up online, as you will be able to see their disciplinary record, background information, and ratings from previous clients.

It’s a good idea to contact the three major credit bureaus and get fresh copies of the credit reports they have on you once your bankruptcy is a few months behind you. Check that your reports accurately reflect all your closed accounts and discharged debts. Challenge discrepancies as soon as possible in order to repair your credit.

Include any and all debts you need eliminated in your paperwork. Any debts not included will not be discharged at your bankruptcy. It’s your responsibility to ensure everything is written down to avoid getting charged for debts that can be discharged.

One common contributing factor for bankruptcy is the financial consequences of filing for divorce, so make sure to consider your plans carefully. Many people who divorce must immediately file bankruptcy because of unforeseen financial difficulties. It is often wise to give the situation more thought before making a final decision.

Some attorneys have a free phone service where creditors can be referred when they try to contact you in regards to a delinquent account. By contacting the phone number that you supply, your creditors can get confirmation that a bankruptcy filing incorporating their debt is underway. That will help you avoid them in the future.

Chapter 13

If you file for Chapter 7 bankruptcy, then find out you cannot protect your home, it may be possible to change your filing to a Chapter 13. Since it may be better to file Chapter 13 rather than Chapter 7, make sure your attorney presents all of your options to you.

This article has made it known that bankruptcy is something you may be able to turn to. But, you need to look at all of your options rather than jumping into bankruptcy head first. Bankruptcy has negative ramifications that can effect you for awhile. Learn all that you can about bankruptcy before you file. That way, you will be prepared to make the best decision for a happy financial future.

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