When You Need To File For Personal BankrupcyPosted at by PConran on category Bankruptcy
Personal bankruptcy is always an option for those who have had possessions, such as vehicles, repossessed by the Internal Revenue Service. Your credibility with lenders will take a beating, but sometimes bankruptcy is the only thing you can do. Continue reading for more information about how and why to file for bankruptcy.
Once a person’s debts outstrip his or her ability to repay them, bankruptcy may be the only option left. When you are faced with this issue, begin to familiarize yourself with your state’s laws. Every state has a separate law having to do with bankruptcy. For example, whether or not you can keep your home, as well as what you need to do to keep it, is different for every state. Be aware of bankruptcy laws before filing your claim.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Generally speaking if you can discharge the tax, you can discharge the debt. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Make sure you are always providing honest documentation whenever you have to file for personal bankruptcy. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. The Bankruptcy Code lists the kinds of assets which are exempted when it comes to the bankruptcy process. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Don’t hide assets or liabilities when filing for bankruptcy. 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. Keeping secrets or trying to outsmart everyone is not a wise move.
You can take steps to hang onto your house. You do not have to lose your home in the process of a bankruptcy. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
You could see about filing for Chapter 13 personal bankruptcy. If you currently have some income and don’t have more than $250k in debt, you can declare bankruptcy. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This plan normally lasts from three to five years, in which you’ll be discharged from unsecured debt. Keep in mind that missed payments will trigger dismissal of your case.
As said in the beginning of the article, personal bankruptcy is always an option. 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. The best way for someone to avoid financial stress and hold onto their possessions is by learning more about bankruptcy.