The national economy is not in very bad shape right now. The result of the dreadful economy is that many people are losing jobs and going into uncontrollable debt. Debts result in bankruptcy, an outcome nobody ever wants.
Don’t use a credit cards to pay your taxes if you’re going to file bankruptcy. In most states, the debt cannot be discharged, and you could be left owing a significant amount to the IRS. This makes using a credit care irrelevant, when it will just be discharged.
You have other options available like consumer credit that consumers can use. Bankruptcy is a permanent part of your credit, so if there are less drastic options that will solve your credit problems, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Do not use a credit card to pay income taxes and then file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Bear this in mind; if the tax can be discharged, then the debt can be as well. Because of this, transferring the debt to your credit card is pointless.
Learn of new laws prior to deciding to file bankruptcy. Bankruptcy laws change a lot and before making the decision to file, and it’s important to stay up-to-date to ensure that you file properly. Your state’s website will have the information that you need.
Filing bankruptcy does not necessarily mean that you have to lose your home. Depending on whether the value of your home has decreased or if you have a second mortgage on the home, you might be able to keep it. You may also want to check into homestead exemption either way just in case.
Before you decide to file for Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, such as family members or business partners. However, anyone sharing the loan with you may be forced to pay back the entire amount for the amount in full, they will be required to pay the debt.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. There are other options available, such as credit counseling for consumers. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
The economy is rebounding slowly, but there are still people who can’t find employment that pays a living wage. Even when your financial situation is not producing enough income, there are some things one can do in order to avoid bankruptcy. It is our sincere hope that this article has helped you to determine a way to avoid filing for personal bankruptcy yourself, or will help a friend or loved one avoid this fate. Also, try to remember that tomorrow provides you with a fresh start.