Things To Look For When You Think It Is Time To File For Personal Bankruptcy
Posted at by PConran on category BankruptcyIf you are facing the repossession of valuables, such as cars or jewelry, you may be feeling some fear. Stop getting debt collector calls and figure out your finances by considering filing for personal bankruptcy. Continue reading for tips to help you get through bankruptcy.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Should the tax be dischargeable, the debt is often dischargeable as well. If you live in an area where tax can be discharged through bankruptcy, financing your tax bill is pretty pointless.
If you know people who have filed for bankruptcy, ask them who they would recommend rather than relying on Internet reviews or worse, just randomly picking someone out of the phone book. There are lawyers out there who will take advantage of your financial state and not deal honestly with you. Make sure your filing process goes as well as possible by finding a trustworthy lawyer.
You should never give up. Certain property cannot be repossessed while you are in the process of filing for bankruptcy so be sure to learn about the laws in your state. If your personal property was repossessed within 90 days before your bankruptcy filing, you may have a chance of getting it back. Consult with a lawyer that can walk you through the filing process.
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. You will no longer be liable for any money that you owe to your creditors. If however you enter Chapter 13, you will go into a five year repayment program prior to your debts dissolving entirely. Both options have advantages and drawbacks, so do your research before deciding.
Make sure you know how to differentiate between Chapter 13 and Chapter 7. Weigh all the information you can find on- and off-line to make an educated decision. If you have trouble understanding the wealth of information, talk to your lawyer so he or she can help you make an informed choice.
It is imperative that you know for sure that bankruptcy is the option you need. You may be able to get away with going through debt consolidation to help make the payments easier to deal with. A bankruptcy filing takes a great deal of time, and it can be extremely stressful. You should be aware that there are some negative ramifications to it, like extreme damage to your credit score. This is why it is crucial that you explore your other debt relief options first.
If concerned about keeping possessions like a car, find out if your attorney can reduce the payment. Often, you can negotiate a lower payment through bankruptcy. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.
If you have a co-debtor, consider the ramifications that filing a Chapter 7 bankruptcy will have. You may have your responsibility for your portion of the loan discharged under Chapter 7. However, creditors can demand co-debtors pay the amount in full.
Although personal bankruptcy is always an option, do not pursue this before looking into other avenues. Keep in mind that many scam debt-consolidation services have sprung up since the increase in bankruptcies, so do your homework before choosing one. Keep these tips in mind to make the best choices for your financial future and to avoid worsening your debt.