Filing for bankruptcy is a decision that shouldn’t be undertaken without a lot of deliberation. It is important that you understand everything involved in filing bankruptcy. If you want to take the next right step, simply follow that tips presented here. Whatever difficult choices you must make, it can be made easier with research.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Remember that if you can discharge the tax you can discharge the debt. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement funds should be avoided at all costs. 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.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won’t work. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Remember that if you can discharge the tax you can discharge the debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Always be honest with the information you give about your finances. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. There are plenty of companies who know how to take advantage of people who seem desperate, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
You must be entirely candid when it comes to declaring assets and obligations in your bankruptcy petition. The person you choose to file with needs to know both the good and bad aspects of your finances. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. There are plenty of other options open to you, like consumer credit counseling. 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.
As you have read in this article, there are many ways to file personal bankruptcy. Don’t be overwhelmed by the vast amount of information available. Think about the tips included above. When you think things through, you make good decisions in life.