On The Road To A Personal Bankruptcy Discharge
Posted at by PConran on category BankruptcyWhen someone files for bankruptcy, it’s not a good thing. Bankruptcy can be a bad sign and can be embarrassing to tell others about in regards to your financial status. Use the tips in this article to help you avoid bankruptcy so you can save yourself from all that trouble.
Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. When you get into this situation yourself, your first step is to familiarize yourself with your local bankruptcy regulations. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. Some states protect your home, and others do not. It is important to be cognizant of the laws in your state before filing for bankruptcy.
Make sure that you understand everything you can about personal bankruptcy by visiting websites that offer information. Many sites, including the U.S. Department of Justice, NACBA, and American Bankruptcy Institute websites are all great places to go for up-to-date information. You need to spend some time gathering valuable information so you can file your bankruptcy with confidence.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
If you are feeling like you are seriously going to have to file for bankruptcy then do not clear out your savings. 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.
Do not hesitate to remind your lawyer of any details regarding your case. Just because you have told him something of importance that he will remember it. All information submitted to the court with your signature needs to be double checked.
See if there is an alternative you can use before declaring bankruptcy. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
Make sure that you understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. All debt will be eliminated with Chapter 7. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy though will make you work out a payment plan that takes 60 months to work with until the debts go away. When choosing the type of personal bankruptcy that is correct for you, it is very important that you know the differences.
If you are going to be filing for bankruptcy, think about filing Chapter 13. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
Clearly, bankruptcy does not need to be inevitable. Use the tips you just read to make the best decision possible. Learn to live within your means and bankruptcy may be avoided.