Can Personal Bankruptcy Help My Financial Situation?

Filing for bankruptcy is a very important decision and one that shouldn’t be taken lightly. Check out the advice given in this article so that you can have an idea of what you can expect before you make such an important decision. Find out all the information you can before filing for bankruptcy.

If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Generally speaking if you can discharge the tax, you can discharge the debt. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.

Ensure that you are providing genuine details when filing a bankruptcy petition, because honesty is the best policy when dealing with bankruptcy. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.

Do not use a credit card to manage your tax issues and then try to file bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. It is pointless to use credit cards if they can be discharged.

Don’t be afraid to remind your lawyer about important aspects of your case. Don’t assume that they’ll remember something important later without having a reminder. This is your bankruptcy and your future, so never be nervous about speaking your mind.

Unsecured Credit

It can be difficult to obtain unsecured credit once you have filed for bankruptcy. If you find that to be the situation, consider requesting secured cards. You can exhibit your desire to rebuild your credit this way. After some time passes they may be willing to offer you unsecured credit.

Don’t look at bankruptcy as a first step. Look at all the other options you may have first. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.

If you are planning to file for bankruptcy, be sure to learn what types of assets you will be able to keep and which can be seized. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.

Hire a lawyer if you plan on filing for bankruptcy. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.

Avoid filing for bankruptcy if you make more money than your monthly bills. Although bankruptcy might seem to be an easy way of being able to pay for your debts, you must remember that it is something that will remain roughly about 7 to 10 years in your credit report.

When you feel certain that you must file for personal bankruptcy, refrain from squandering your life savings to pay off unsecured debt. Unless there is no other choice a retirement account should not be used. If you have to use a portion of your savings, make sure that you save some to ensure that you are financially secure in the future.

Interest Rates

Think about all the choices available to you when you file for bankruptcy. Instead of rushing into bankruptcy, a good idea is too speak with an attorney who may be able to get your interest rates reduced or help get you on a debt repayment program. If you are facing foreclosure, consider a loan modification plan. The lender is able to help you in a number of ways, such as reducing interest rates, eliminating late charges, and even lengthening the loan, giving you more time to pay. Most creditors will be willing to work out an option to avoid not getting paid at all.

Take some time after filing for bankruptcy to enjoy life. After filing, many people find themselves stressing over their situation and how to fix it. This stress could morph into clinical depression, if you fail to adequately address the problem. Things will be sunnier after you take positive steps to move forward.

Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. If this happens to you, think about applying for a couple of secured credit cards. This will show people that you are serious about getting your credit record back in order. Eventually, you could be able to obtain unsecured credit.

Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. When filing for Chapter 7, you won’t be responsible legally for debt signed by co-debtors and yourself. Although, your creditors may insist that the co-debtor pay off the entire debt.

Filing for bankruptcy can cause stress. Be certain that you hire a competent lawyer to minimize the stress and anxiety you are under. Get recommendations and look into other qualifications rather just choosing based on cost alone. The most expensive attorneys are not necessarily the best ones. Rely on word-of-mouth referrals from others who have filed for bankruptcy, check the BBB, and take advantage of free consultation offers. Attending a court hearing will give you experience as to how lawyers handle these cases.

Don’t wait until it is too late to file for bankruptcy. Often, people try to act like they are not in financial straits. They imagine the issues will blow away, but they do not. It is too easy for debt to mount up and become uncontrollable, which could lead to loss of assets or wages. Speak with a bankruptcy lawyer as soon as you become aware that you cannot handle your debts.

Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.

This article has probably helped you see that bankruptcy is a process that involves a lot of planning. You must do a wide variety of things correctly. If you follow the advice given here, you’ll be able to make sure you have everything in order for when you file bankruptcy.