Considering Bankruptcy? Read These Important Tips First!
Posted at by PConran on category BankruptcyIs is often hard to live with bankruptcy. When you’re constrained financially, your options become limited, in general. Your future lending requirements will not be permanently hindered by bankruptcy, read on to find out why.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
Weigh all of your options before declaring bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Remember to understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Should you choose Chapter 7, your total debt load will be erased. All happenings with creditors will disappear. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. In order to choose the right bankruptcy option, you need to know the differences between these kinds of personal bankruptcy filings.
Determine if bankruptcy is necessary. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Bankruptcy cases are long, anxiety-filled experiences. It will have a long-lasting effect of your future credit opportunities. Personal bankruptcy should be undertaken as a last resort when no other workable options are available to you.
Thing about filing a Chapter 13 bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. That way, you can hold onto your personal assets and pay back a portion of your debts pursuant to an approved plan. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. Consider that if you even miss one payment, your case will not be considered by the court.
If you are in the situation to need to file for bankruptcy, this article has shown you that it is not the end of your life. Establishing a record of saving money and paying your debts on time will increase your credit worthiness. Eventually, you will be able to brush every bit of that dirt off of your shoulders and once again be able to live a normal, credit-driven life if you so choose.