Tips And Advice When Bankruptcy Is In The Picture
Posted at by PConran on category BankruptcyFiling for bankruptcy can be a viable for anyone who has had their possessions repossessed by the IRS. Although bankruptcy tends to destroy a person’s credit, it’s occasionally the only available option. Continue reading this article to understand what you need to know about bankruptcy and the likely end result of going through one.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. In many parts of the country, you cannot get this debt discharged, and in the end you will be left owing the IRS a big sum of money. A common rule is that dischargeable tax means dischargeable debt. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Before filing for personal bankruptcy, make sure you are doing the right thing. Alternatives do exist, including consumer credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
Never shirk on the truth in your petition for bankruptcy. Withholding or lying about certain information can seriously worsen your financial situation. It could lead to being unable to file for bankruptcy or even legal trouble.
You are going to get found out and get in trouble if you don’t disclose all your assets, so be totally honest from the beginning. It is important that you are completely transparent, showing everything financial that needs to be known. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Don’t ever pay a bankruptcy attorney for a consultation, and ask a lot of questions. The majority of lawyers offer their first consult at no cost, so ensure you meet with several to find one that you like. Don’t hire an attorney who fails to address all your concerns and questions. Take your time before you decide to file after you meet with your lawyer. So you have sufficient time to speak with a number of lawyers.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. Chapter 7 involves the elimination of all of your debt. This type of bankruptcy ends any relationship you might have with creditors. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. It is vital that you know the differences between these types of bankruptcies, in order to find the option that’s best for you.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. It usually takes three to five years to fulfill this plan. When the time is up, you’re unsecured debts will be discharged. Remember that missing a payment to the plan will result in your case being dismissed.
Once you clear the hurdle of filing for bankruptcy, live a little, but not too much. Many debtors stress-out during the time of filing. This kind of stress can take a heavy toll on your personal life, especially if you are not making any efforts to adopt a positive attitude. Life will surely get better after you finish this process.
We would like to reiterate that you always have the option of filing for personal bankruptcy. That said, you should think twice before filing, since it leaves a huge black mark on your credit. Reading up on the right ways to handle your situation will save you a lot of headaches in the long run.