Many people are quick to judge others badly when they have to declare bankruptcy, yet they are also as quick to change their mind if they are suddenly in that boat. Major life changes, including divorce and job loss can quickly cause a financially stable person to become insolvent, forcing him to file for bankruptcy. If filing for bankruptcy is your only choice, educate yourself on the process.
Credit Cards
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Check the accuracy of all information before it is filed. You cannot expect your lawyer to remember every important detail without some reminder from you. All information submitted to the court with your signature needs to be double checked.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Most lawyers offer free consultations, so consult with a few before settling on one. Do not make any final decisions until every question you have has been answered. You don’t need to decide what to do right away. So, this gives you plenty of time to consult with several attorneys.
Determine if bankruptcy is necessary. Perhaps just consolidating some of your existing debt, could make them easier to manage. Bankruptcy is not a simple, breezy course of action that should be taken lightly. It will certainly affect the credit rating that you have in the future. Therefore, before you file for bankruptcy you need to consider all of your alternatives.
Do not file for bankruptcy if your income is greater than your bills. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
If you filed for Chapter 13 bankruptcy, you can still get a mortgage or a car loan. However, it will be a longer and more arduous task. Before you can take out a new loan, you will have to clear it with your trustee. Draw a budget up and show how you can pay the newer loan payment. The odds are also good that you will be asked exactly why you’re purchasing a new item. Make sure you have a good reason.
Understand the rights you have as a bankruptcy filer. Some bill collectors will tell you that your debts can’t be bankrupted. There are very few debts, such as child support or student loan debt, that can’t be bankrupted. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
Do not wait until things go from bad to worse before filing bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. If debts are not dealt with quickly, things can quickly get out of control. Not only will you be faced with late fees and interest, but you may also be faced with a wage garnishment or foreclosure if you ignore your financial woes. As soon as you know that you are too far over your head, make the move to call an attorney skilled in bankruptcy court, to weigh your options.
Personal Bankruptcy
Learn about the personal bankruptcy rules before petitioning. There are many pitfalls when it comes to the code pertaining to personal bankruptcy that can lead to a lot of unwanted issues. It is even possible for your whole petition to be thrown out of court due to errors being made. Before you go forward, make sure you thoroughly research personal bankruptcy. Doing this will make the process easier.
Before you make the final decision to file bankruptcy, consider the other options you have. Perhaps credit counseling can resolve your issues. There are non-profit organizations that you can use. They can work with the creditors to lower payments and interest. They act as intermediaries between you and your creditors; you pay the counselors and they pay the companies to which you owe money.
Don’t take out big cash advances from any of your credit cards prior to filing for bankruptcy, taking advantage of the fact that those debts will later be erased. Doing so, is a type of fraud that may result in your having to pay back all money advanced from credit card accounts in the months just prior to your bankruptcy.
If you have tried everything to save your finances but have been unable to find a solution, it might be necessary for you to file bankruptcy. Don’t carry the weight of the world on your shoulders. If the circumstances that brought you here were not within your ability to control, let go of the stress and guilt associated with them. Valuable information is awaiting your attention within the following paragraphs.
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