Tips To Consider If You Are Thinking About Filing For Bankruptcy
Posted at by PConran on category BankruptcyThe economy is not in good shape. People carry more debt and find it harder to stay fully employed when the economy is this bad. Debts can result in filing for bankruptcy, which can seem to be a terrible thing. Continue reading this article for information about bankruptcy and whether it is the right choice.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. A common rule is that dischargeable tax means dischargeable debt. So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.
Don’t pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. When you arrive at a consultation ask plenty of questions. You should also seek free consultations from several attorneys prior to choosing one. Do not make any final decisions until every question you have has been answered. You need not decide right away. You could even go to different lawyers for advice.
If you are about to file for bankruptcy, then make sure you hire a lawyer. There are a lot of things to do during bankruptcy and that may be hard for you to understand on your own. When you engage the services of a bankruptcy lawyer, you can be assured of getting the help your need to proceed correctly.
Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. Chapter 7, for example, will wipe away every one of your outstanding debts. All happenings with creditors will disappear. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Safeguard your most valuable asset–your home. You don’t have to lose your home just because you are filing for bankruptcy. If your home value has gone down, or if there’s a second mortgage, you might be able to keep it. You can also investigate your state’s homestead exemption, an option that might enable you to keep your home if certain financial requirements are met.
Ensure that you bankruptcy is your best choice. You may well be able to regain control over your debts by consolidating them. Filling for bankruptcy could be a long and stressful process. It will have a major effect on your credit as time goes on. Thus, you must make certain that bankruptcy really is the only viable solution to your problems.
Learn what you can about Chapter 13 bankruptcies. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This type of bankruptcy protects your assets from seizure and lets you repay your credits over the course of a few years. Expect to make payments for up to 5 years before your unsecured debts are discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Although the economy is slowly picking up, there are still many people left without jobs and a decent wage. Although bankruptcy can be avoided in some cases; there are other cases where bankruptcy is the only sensible option. Hopefully, after reading this article, you picked up on a few of the things that will help you avoid filing for bankruptcy. Hopefully, everything works out for you!