Techniques For Getting The Most Out Of Filing Bankruptcy
Posted at by PConran on category BankruptcyWhen you’re indebted to people or institutions, it’s only a matter of time before they show up at your door to collect. Sometimes literally. When you file for personal bankruptcy, you will be able to sort out your finances and end calls from debt collectors. This article has tips that can help you through this complicated journey.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Generally speaking 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.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
You might experience trouble with getting unsecured credit after filing for bankruptcy. A great way to rebuild your credit is to apply for a prepaid credit card. This demonstrates to creditors that you are making a good faith effort to repair your credit. After a time, you are going to be able to have unsecured credit cards too.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves the elimination of all of your debt. Any ties that you have with creditors will be dissolved. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. Take the time to learn more about these different options so you can make the best decision possible.
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 you file under Chapter 7, you will no longer be legally responsible for any debts that were signed by yourself and a co-debtor. Although, your creditors may insist that the co-debtor pay off the entire debt.
Car loans or mortgage loans are still a possibility when you have filed for Chapter 13. However, the process of approval is a bit more stringent. You will need to go through various hoops in order to be approved for any new loan type. You need to show them why and how you can handle paying back the new loan. You also need to be prepared to answer questions about your need for the new item.
Learn about the personal bankruptcy rules before petitioning. You need to be aware of any issues you will encounter with the bankruptcy code. Small errors could even cause your case to be dismissed. Take the time to research personal bankruptcy before moving forward. This will help your process go smoother.
Always look into other options and make personal bankruptcy your last resort. Also keep in mind that a lot of debt consolidation companies are scams that can make your debt worse. Keep the advice from this piece in mind to help you make smart financial decisions.