How To Rebuild Your Credit After Filing Bankruptcy
Posted at by PConran on category BankruptcyBankruptcy is a tough decision for people to make, but in many situations, it is the correct choice. Going into this situation is best served when you are armed with some good ideas and insights about what is going to be involved. Keep reading to learn some solid advice for navigating the treacherous world of bankruptcy.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
Bankruptcy is tricky and hiring a good lawyer will be a must. Filing for bankruptcy is a complicated procedure, and you may not be aware of all the ins and outs. Personal bankruptcy attorneys can help make sure everything is done properly.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Laws are subject to change, and it’s important that you’re educating yourself about current code only. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.
Weigh all of your options before declaring bankruptcy. For example, if you only have a little bit of debt, you might be better off if you went through consumer credit counseling. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Protect your house. Filing bankruptcy does not necessarily mean that you will lose your house. It depends what your home value is and if there is a second mortgage, as all this stuff comes into play when determining if you can keep the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
Consider filing using chapter 13 bankruptcy. In most states, Chapter 13 bankruptcy law stipulates that you must have under $250,000 of unsecured debt and a steady income. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. These kinds of plans usually range across 3, 4 and 5 years. Once this is done, all your unsecured debt will get discharged. Missing a payment under these plans can result in total dismissal by the courts.
After your initial filing, take time to enjoy yourself a bit and get your mind off of it. Bankruptcy is a stressful process: you will have to go over your bad financial decisions and perhaps feel ashamed about your decision. Don’t let the process control you in a negative way. You will get through it, and you should make an effort to remember that. Bankruptcy is hard to go through, but you must remember that a less stressful, more enjoyable life is waiting on the other side of it.
Nobody wants to file for bankruptcy, but in some cases the situation becomes necessary. Having studied the information in this article, hopefully you are better prepared to deal with the bankruptcy process. Spending some time learning for others who have gone through the same thing reduce some of your stress.