Filing for bankruptcy can be a viable for anyone who has had possessions repossessed by the IRS. Bankruptcy can wreak havoc on credit, but is often unavoidable. Read this article to learn more when it comes to filing bankruptcy as well as the consequences of doing so.
Exhaust every other option before making the decision to file for personal bankruptcy. Consider any other options that are available to you, 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.
Be sure everything is clear to you about personal bankruptcy by using online resources. Department of Justice and National Association for Consumer Bankruptcy Attorneys provide free advice.
Don’t use credit cards to pay off your taxes before filing for bankruptcy. In many areas of the country, the debt cannot be discharged, and you may still owe money to the IRS. This makes using a credit care irrelevant, when it will just be discharged.
Take advantage of free consultations with lawyers and the ability to sift through and find the right one. Never settle for speaking with a paralegal or an assistant. They are not trained, nor allowed, to pass on legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.
You shouldn’t dip into your retirement savings unless there is nothing else you can do. Although it is quite normal to use some of your savings, you should not use up all of it right now and jeopardize the financial security of your future.
Never lie about anything in your petition for bankruptcy.
If you are making more money than you owe, bankruptcy should not even be an option. The cost to your credit history far outweighs the simplicity of the easy-out bankruptcy. This is a hard pill to swallow for many.
Unsecured Credit
You may still have trouble receiving any unsecured credit after emerging from bankruptcy. If you find yourself in this situation, consider requesting secured cards. This will be a demonstration of the seriousness with which you view rebuilding your credit. After using a secured card for a certain amount of time, you may be able to get unsecured credit again.
Go ahead and file for personal bankruptcy as soon as you realize it is necessary. Some people think that by ignoring financial problems, they will just disappear. This kind of thinking could prove to be a mistake. Being in debt can quickly put you into very deep hole and if you do not rectify the situation fast, you could face wage garnishment or even worse, foreclosure. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.
When choosing a bankruptcy lawyer, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. There are a number of companies who may take advantage of your situation, and it’s important to be sure your bankruptcy can go smoothly; take your time and choose someone you can trust.
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 bankruptcy completely wipes out your debts for good. Any ties that you have with creditors will be wiped clean. Chapter 13 bankruptcy though will make you work out a five year repayment plan to eliminate all your debts.
Do not pay off debts blindly before you file a personal bankruptcy. You might be legally unable to file for bankruptcy if you were still paying your creditors ninety days ago, or your family members a year ago. Make sure you have a complete understanding of what is occurring prior to making any final decisions.
Make sure you meet with a licensed attorney rather than a paralegal or assistant, as these people are not allowed to provide legal advice.
Filing bankruptcy does not necessarily mean you will lose your home. Depending on if your home’s value has gone down or if it has a second mortgage, you may end up keeping it. You may also want to check out the homestead exemption either way just in case.
It is important to consult with an attorney who specializes in bankruptcy if you are headed toward bankruptcy. Here are some of the things a qualified bankruptcy attorney can do for you: give you solid advice, simplify the complexity of the process, represent you in the courtroom. Your attorney may also help you with any questions you may have, as well as assist you in completing the paperwork you need to complete.
Chapter 13
Consider if Chapter 13 bankruptcy for your filing. If your total debt is under $250,000, Chapter 13 will be available to you. This lasts for three to five years and after this, in which you’ll be discharged from unsecured debt.Keep in mind that even missing one payment can be enough for your case.
Obtain copies of all credit reports about six months after the bankruptcy petition has been approved. Errors occur, so make sure things appear exactly as they should. Follow up on any discrepancies right away, so that you can begin repairing your credit.
In order for this to succeed, your car loan must be one with high interest, have a higher interest loan for it as well as a consistent work history.
Make sure you file a bankruptcy claim. Timing is very important when it comes to personal bankruptcy cases.In certain situations, it is better to file immediately, but other situations will warrant you waiting. Speak to a bankruptcy lawyer to determine what the proper timing is for you to file bankruptcy.
If you find out that you don’t qualify for the Homestead Exemption after filing Chapter 7 bankruptcy, you may be able to file Chapter 13 in addition for your mortgage. There may be situations in which it makes more sense to convert a Chapter 7 case to a Chapter 13, but it is important to discuss such a strategy with your lawyer.
Make a list of financial information on your debts before filing. If you do not do so accurately, you may end up in some serious trouble, but at the least your claim will be denied. This type of income could come from doing odd jobs, vehicles you own and loans you have not paid off.
Now you can see why bankruptcy may be a good option for you. The consequences for your credit make it a last resort in most cases. Reading up on the right ways to handle your situation will save you a lot of headaches in the long run.
Make sure the paperwork is filled out correctly. Even though you might have a lawyer fill out your paperwork and file it, you are personally responsible for making certain that all information within the documents are accurate. Keep in mind that an attorney is dealing with more than one case, so keeping the details straight for each is unlikely 100% of the time. This does happen on occasion, so you should take it upon yourself to double check all the information to ensure everything is correct.