There are good and bad feelings associated with bankruptcy. You will have to thoroughly review your finances and allow strangers to scrutinize them even harder; this is naturally stressful. On the other, however, after the bankruptcy has been discharged, you can get a fresh start and begin to re-build your credit. You can make bankruptcy easier with the following tips.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state. Some states protect your home, and others do not. Know what the laws are in your state before filing.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. 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. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. Bear this in mind; if the tax can be discharged, then the debt can be as well. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Think through your decision to file for bankruptcy carefully before going ahead with it. It is possible to take advantage of other options, like consumer credit counseling. Be sure to consider all options before filing for personal bankruptcy, as this will take a large toll on your credit score for the next ten years.
Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If that’s the case, it is beneficial to apply for one or even two secured cards. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. After a time, you are going to be able to have unsecured credit cards too.
Try to make certain you are making the right choice prior to filing your petition. Avail yourself of other options, including consumer credit counseling, if they are appropriate for your situation. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Educate yourself about state bankruptcy laws and possible outcomes before filing your petition. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn’t mean that the laws will be the same this year. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Consider other alternatives before filing for bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. By shopping lawyers, you will be more likely to find one that makes you comfortable about the process.
After a bankruptcy, you may still see problems getting any kind of unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. By doing this, you will be letting people know that you want to fix your credit score. In time, you might be granted unsecured credit again.
Never forget that you still deserve to enjoy life while you go through the bankruptcy process. After filing, many people find themselves stressing over their situation and how to fix it. Stress easily leads to depression, if you are not maintaining control of your emotions. You must realize that things will get better over time.
Before you file, make sure you understand the laws as much as possible. As an example, it is prohibited for someone to transfer assets from the filer’s name for one year prior to filing. It is also against the law to max out your credit cards before filing for bankruptcy.
Try going to a personally recommended bankruptcy lawyer instead of using a phone book or the Internet. There are lots of unsavory companies and lawyers out there who prey on people who are in desperate straits. It is up to you to find someone that is trustworthy and can make the process go smoothly.
Consider any other options available before filing for personal bankruptcy. For example, you may want to think about credit counseling. A number of non-profit companies can assist you. They can help you to lower both your debts and interest owed to creditors. The payments you make go to the credit counseling company, and they send that money to your creditors.
If you feel that bankruptcy filing may be right for you, seek some legal advice first from a specialist lawyer. Your lawyer can determine if you eve need to file, and if you do, act as an advocate in court and make the process go more smoothly. A lawyer will be able to file and fill out all of the necessary paperwork, as well as answer any questions that you may have.
After filing for bankruptcy, wait a couple of months and then access your credit reports via the three major agencies that handle credit report. Errors occur, so make sure things appear exactly as they should. If there are any errors, make sure that you take action to resolve them as soon as possible.
When a bankruptcy is imminent, retain a lawyer immediately. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
If you’re in financial trouble, you may want to rethink getting a divorce. When many people divorce, they have to pursue a bankruptcy when the realities of the costs comes to light. Making sure that divorce is a good option is best.
If you file a Chapter 7 bankruptcy only to find that you are not qualified to use the homestead exemption, you might be able to put place your mortgage in a Chapter 13 case. Sometimes the best thing to do is completely convert your Chapter 7 bankruptcy case to a Chapter 13 bankruptcy case. You’ll need to discuss this with your lawyer.
Before declaring bankruptcy, see if there’s anything less drastic you can do to repair your credit. There are many other options including debt consolidation and making payment plans with your creditors. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. The lender may be willing to reduce interest rates, eliminate late charges or extend the life of the loan. When all is said and done, the creditors want their money, so sometimes it’s best to deal with a repayment plan than with a bankruptcy debtor.
If you find yourself getting depressed over filing for bankruptcy it is a good idea to talk to others in the same situation. The bankruptcy process can be stressful; it can often leave you feeling out of place in the company of your friends. On the Internet, however, you can share your struggles and ask for advice from people who have already been through bankruptcy.
There are many different reasons why people choose to file for bankruptcy. No matter why you have decided to file, remember that knowledge is power when it comes to managing the situation. What you read above can easily help you get a handle on the entire process. As long as you implement these tips how you read them, you should be able to make much more sense of the process.