If you were unfortunate enough to have your property repossessed by the tax man, you should probably consider bankruptcy. Bankruptcy is a major life decision, but sometimes it can be the right choice. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state. Some states may protect you home, and some may not. Know what the laws are in your state before filing.
Knowledge is power when you’re considering bankrupcy; there are many websites available to help you. The U.S. Department of Justice and American Bankruptcy Institute are both sites that provide free advice. The more knowledgeable you are, the more you can be sure that you are making the right decision and that you are taking the right steps to ensure your personal bankruptcy goes as smoothly as possible.
Be sure you’re doing what’s right before you file for bankruptcy. You can also avail yourself of other options, such as consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Remember that 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.
Before you proceed with your personal bankruptcy case, review your decisions to be certain that the choice you are making is the right. There are plenty of other options open to you, like consumer credit counseling. Bankruptcy leaves a permanent mark on your credit history, so before you take such a large step, you want to exhaust all other options so that the future effects on your credit history are as minimal as possible.
Don’t give up. Certain property cannot be repossessed while you are in the process of filing for bankruptcy so be sure to learn about the laws in your state. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Get help from your lawyer to file a petition so you can get your items back.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad” your answers a little. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.
Prior to filing for bankruptcy, determine which assets, if any, are exempt from being seized. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you fail to go over this list, you may be unpleasantly surprised sometime down the road if any of your most valued items are seized.
Before filing for bankruptcy, hire a qualified attorney. Having a lawyer on your side is the best way to avoid mistakes and bad decisions. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Most lawyers will meet with you for free and give you helpful advice, so meet with several. Make your decision after all of your questions have been answered. After your consultation, take your time to make your decision. So, this gives you plenty of time to consult with several attorneys.
See if there is an alternative you can use before declaring bankruptcy. For example, consumer credit counseling programs can help if your debt isn’t too large. You may have the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Filing for bankruptcy, and all that comes with it, can be hard to handle at times. It is long, stressful and makes people feel like losers. Lots of people decide they should hide from everyone else until it is all over. This isn’t true though because when you isolate yourself you will just start to feel worse and may become depressed. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
If your paycheck is larger than your debts, avoid filing for bankruptcy. Bankruptcy might seem like a good way to get out of paying your bills, but it will devastate your credit for the next ten years.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Be sure you go on the Internet and do your research to see what’s best for you. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
As you can see by now, you do have the option of filing bankruptcy. However, it must not be your first choice due to it causing complications on your credit. Staying informed on how to manage this situation could prevent you from experiencing headaches and it can also help you keep your valuables.