Bankruptcy: Is It Right For You?
It’s not uncommon for people to look down on others who choose bankruptcy, but that feeling disappears when filing for it becomes a possibility.A financial catastrophe, such as divorce or job loss, can quickly change a life to the point where bankruptcy may be the only way out. If you find yourself in this situation, you can help yourself with the contents of this article.
You have other options available like counseling for credit that consumers can use.Bankruptcy stays on your credit for a whole decade, so before you make such a big decision, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
You may still have trouble receiving any unsecured credit card or line after emerging from bankruptcy. If that’s the case, think about applying for a couple of secured credit cards. This will be a demonstration of the seriousness with which you want to improve your credit score. After using a secured card for a certain amount of time, you are going to be able to have unsecured credit cards too.
It is simple math; when you owe more than you are able to pay off, a bankruptcy is the likely solution. If you’re in this situation, learn about the laws where you live. You will find that each state has their own bankruptcy laws. In some areas, your residence may be completely exempt, but in others, it will not be. Make sure you know the laws where you live before you file.
The Bankruptcy Code contains a list of various assets that are exempt from forfeiture to pay off creditors. If you aren’t aware of this, you might find yourself getting surprised when your favorite things are repossessed.
Chapter 13 Bankruptcy
Consider if Chapter 13 bankruptcy for your filing. If you owe an amount under $250,000, you can file for Chapter 13 bankruptcy. This plan normally lasts from three to five years, your unsecured debt will be discharged. Keep in mind that even missing one payment can be enough for your case.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. If the tax can be discharged, so can the debt. This means using a credit card is not necessary, when it will just be discharged.
After you’ve exhausted every other option, you might determine that bankruptcy is the only way out of your debt crisis. You should not let it ruin your life though if you find yourself facing this decision. Although the bankruptcy process can last several months, you will be less stressed out if you understand everything that is happening.