If you are faced with the threat of repossession of valuable assets, you may become terrified of the IRS. End calls from debt collectors and gain control over your finances by filing for bankruptcy. In the following paragraphs, you’ll find advice that will guide you through the bankruptcy process.
Generally bankruptcy is filed when a person is facing insurmountable debt. If this is your case, you should do some research about bankruptcy laws in your state. Bankruptcy laws vary from state to state. For instance, in some states you can keep your home and car, while other states prohibit this. Do not file before learning about the bankruptcy laws in your state.
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If you are in this situation, applying for a secured card may be the answer. You can exhibit your desire to rebuild your credit this way. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
Keep working to improve your situation. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
Any bankruptcy consultation should be free of charge. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Only make a decision after you have met with several attorneys and all of your concerns and questions have been addressed. You don’t need to decide what to do right away. Consulting with several attorneys will also help you find someone you trust.
Be sure to hire an attorney before you embark upon filing for personal bankruptcy. Bankruptcy is complicated, and having someone to help you navigate the process is crucial. Your lawyer will make sure that the filings are correct and help you navigate the complex process of filing for bankruptcy.
Chapter 7
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. If you file using Chapter 7 bankruptcy, you will get all your debts eliminated. Your ties with all creditors will get dissolved. On the other hand, filing for bankruptcy under Chapter 13 means you will have 60 months to pay your debts back. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.
It’s a good idea to meet with a number of bankruptcy lawyers before settling upon one. The majority of them offer free initial consultations. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can’t give legal advice. It will be important to work with a bankruptcy lawyer that you feel comfortable with; a little comparison shopping will help you find the right one.
Determine if bankruptcy is necessary. It may be that all you really need to do is consolidate some of your debts. Bankruptcy is a long process that can be stressful. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. Before you decide to file for bankruptcy you want to be absolutely certain that it is the only way to resolve your problems.
Consider Chapter 13 bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. This lets you keep any real estate and personal property while you repay all your debts through a consolidation program. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.
While personal bankruptcy can always be an option, don’t do it before looking at other options. Be aware that some debt consolidation companies could cause you even more debt. If you must file bankruptcy, learn from your mistakes and become a more conscientious consumer.
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