How Long Does It Take To Recover From Bankruptcy
Posted at by PConran on category BankruptcyAnyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Although bankruptcy tends to destroy a person’s credit, it’s occasionally the only available option. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. If the tax has the ability to be eliminated, the debt can be too. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. To avoid problems, penalties and future re-filing bans, resist the urge to hide documentation or assets.
Prior to filing for bankruptcy, discover which assets cannot be seized. 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. You may find yourself unpleasantly surprised when the things you value the most are taken from you without warning. This is why it is very important the familiarize yourself with this list.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. Regardless of the agency you file with, ensure that you tell them all they should know about your current financial situation, regardless of how good or bad it is. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Learn the newest bankruptcy laws before filing. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. Your state will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. There are numerous programs out there that may assist you with your debt, like a credit counseling program, a nonprofit group, government assistance, etc. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.
Be sure you know how Chapter 7 and Chapter 13 differ. Chapter 7 bankruptcy completely wipes out your debt. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. Look into both types of bankruptcy before deciding which one would suit your particular needs.
As this article has shown, there are many aspects to bankruptcy to consider. But, you need to look at all of your options rather than jumping into bankruptcy head first. Bankruptcy has negative ramifications that can effect you for awhile. As long as you’re properly informed about which moves to take and when, you should have little trouble navigating the process and ultimately restructuring your credit.