Understanding Why Bankruptcy Is Not The End Of The World
Posted at by PConran on category BankruptcyAlthough bankruptcy causes stress, it can help financially. On one hand, people will be scrutinizing your private financial affairs. The relief is that your phone will stop ringing with harassing phone calls from debt collectors, and you can begin to rebuild your credit. Here are some simple tips anyone can use to help make the process of bankruptcy go smooth.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. Remember that if you can discharge the tax you can discharge the debt. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You shouldn’t dip into your IRA or 401(k) unless there is nothing else you can do. Although it is quite normal to use some of your savings, ensure that you leave enough in your account for emergencies.
Research what assets are exempt from seizure before you decide to declare bankruptcy. There are several assets which are exempt from bankruptcy; therefore, consult the Bankruptcy code. Prior to filing for bankruptcy, it is critical that you go over this list, so that you know if you can expect any of your most valuable possessions to be seized. If you aren’t aware of this, you could lose some assets that you value.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. The lawyer who properly answers your questions is the one you should hire. You do not need to make a decision immediately after the consult. You have lots of time for consulting with other lawyers.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
It is possible to keep your home. It isn’t inevitable that you will lose your house when you file for bankruptcy. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
Don’t file bankruptcy if you can afford to pay your debts. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Filing bankruptcy has its good and bad points. No matter why you have decided to file, remember that knowledge is power when it comes to managing the situation. The tips laid out here will help you cope with bankruptcy in an easier manner. Use the tips presented here to help the process goes smoothly and more comfortably.