Tips To Consider If You Are Thinking About Filing For Bankruptcy
Posted at by PConran on category BankruptcyDealing with bankruptcy is a very hard situation. When things are tough financially, your credit options are limited. Your credit score has been damaged and it can be difficult to get loan approvals. However, although difficult, it is not impossible to secure a loan.
Be certain you understand all you can about bankruptcy by researching reputable sites that offer good information. The United States D.O.J., the A.B.I and the N.A.C.B.A. are all useful organizations willing to provide educational material. Knowing as much as possible about bankruptcy gives you an advantage and will help you make the best decision possible.
Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. In a lot of places, the debt cannot be discharged, and you may still owe money to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
If you’re going to file bankruptcy, you need an attorney. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. A lawyer that specializes in bankruptcy can make sure you are following the correct procedures in your filing.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Talk to a lot of different bankruptcy lawyers; most of them will give you a free consultation. It is important to meet with the actual lawyer, because paralegals or assistants cannot give you legal advice. Look for a lawyer who you can relate to.
Determine if bankruptcy is necessary. Consider whether debt consolidation may be a more viable alternative. Filling for bankruptcy is a lengthy, stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Because of this, you should be sure that bankruptcy is your only option before you file.
Learn what you can about Chapter 13 bankruptcies. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. This lasts for three to five years and after this, your unsecured debt will be discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Filing for bankruptcy is not the best choice if your monthly income is enough to cover your bills. Bankruptcy may seem to be the easy way out, but your credit report will show the scar for the next ten years.
Be decisive at the correct moment in time. In bankruptcy filing, timing is quite important. Sometimes it is the best option to file quickly, whereas in other situations filing should be put off until the worst has already passed. Have a chat with a bankruptcy specialist to discover when the ultimate time would be for you to file.
Bankruptcy is not a financial death sentence. When you save your money and show lenders that you are making serious efforts to reestablish your credibility they look kindly at this. Make the efforts to save and look at the impact it has when you attempt to make a home or car purchase.