Bankruptcy: Tips And Advice For Getting A Fresh Start
Posted at by PConran on category BankruptcyIf you are faced with the threat of repossession of valuable assets, you may become terrified of the IRS. Consider your finances and put an end to creditor calls, by petitioning for personal bankruptcy. This article will provide you with information to help you through this rough time.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. A common rule is that dischargeable tax means dischargeable debt. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Ask yourself if filing for bankruptcy is truly your best option. Look into credit counseling to see if it could help you work out of your debt without bankruptcy. Bankruptcy is a permanent part of your credit, so before you make such a big decision, you might want to explore all other choices so that your credit history is affected as minimally as possible.
Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. Leave your retirement accounts untouched unless there is absolutely no other alternative. You may have withdraw from your savings every now and then, but try to leave yourself some financial security for the future.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. Don’t hide income or assets from your lawyer or the bankruptcy trustee or you may find yourself in legal trouble.
Prior to putting in the bankruptcy paperwork, determine what assets are protected from seizure. The Bankruptcy Code includes a list of the types of assets that are exempt from the bankruptcy process. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. Failure to do this could cause some ugly surprises down the road when you discover that your valuables must be seized.
Protect your house. Filing for bankruptcy does not always mean you will end up losing your home. Depending on certain conditions, you may very well end up being able to keep your home. You may also want to check out the homestead exemption because it may allow you to keep your home.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Be sure you go on the Internet and do your research to see what’s best for you. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
Consider Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Just ensure that you take necessary precautions, as missing one payment can result in the court dismissing your case.
If you are concerned about keeping your car, check with your attorney about lowering the monthly payment. Chapter 7 usually can help payments be lowered. It is necessary for you to have bought your car prior to the 910 days preceding your filing, your loan must carry a high rate of interest and you must be employed in order to get such a modification, however.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. When filing Chapter 7, you are not longer liable for the debts that you and a co-debtor signed for. Creditors, however, will hold the co-signer liable for the entire balance of the debt.
Always look into other options and make personal bankruptcy your last resort. Keep in mind that services that promise debt consolidation are usually scams that make your financial problems worse. Keep the tips here in mind as you navigate through your financial challenges, and prepare yourself for a more successful financial future.