Do not use a credit card to manage your tax issues and then try to file bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Remember that if you can discharge the tax you can discharge the debt. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
If you have been put into the position of needing to file for bankruptcy, you are likely not to be very happy about it, but it does not lead to your life ending. The main purpose is to give yourself a fresh, new start in life. Keep reading for how you can make bankruptcy a second chance instead of financial doom.
Getting unsecured credit post-bankruptcy will likely be difficult. This being the case, look at secured card options. This will demonstrate that you’re seriously trying to restore your credit. Once creditors see that you are making an effort to restore your credit, they may allow you to get an unsecured card in the future.
When you realize that you probably will file for bankruptcy, do not pay your creditors or try to avoid bankruptcy by spending all of your regular or retirement savings. You should never touch your retirement accounts, unless you have absolutely no choice. You may need to use some of your savings; however, you should not use all of your savings. Remember that you must safeguard your future financial security.
Always protect your house. Just because you’re going bankrupt doesn’t mean that you also have to be homeless! You might be able to keep your home, for instance, if you have two mortgages or if your home has lost its value. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
The best way to build your credit up after a bankruptcy is making all your payments on time. Secured cards can be a great way to get started if this happens to you. You can exhibit your desire to rebuild your credit this way. Unsecured credit may be offered to you quicker than you think after doing so.
It is important to look at your financial situation from all possible angles before you decide to file for bankruptcy. For example, you can always talk with a lawyer to see about different options through creditors or other means that will not require wiping the entire slate clean. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. Your lender can help you get current on your loan by offering you one of a number of modifications, such as getting rid of late charges, lowering interest rates, or extending the length of the loan. Most creditors will be willing to work out an option to avoid not getting paid at all.
It is still possible to get a mortgage or car loan, even if you are filing for Chapter 13 bankruptcy. However, it won’t be as easy as it may have been to get one prior to the bankruptcy. Normally, the trustee assigned to your bankruptcy must approve any new loan. In order to show that you’re capable of paying off your new loan, prepare a budget that includes its payments. Also, be sure you have a clear explanation as to why the item you are purchasing is absolutely necessary.
Before you decide to file bankruptcy proceedings, determine which assets will be safe. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you don’t read this list, there is a chance that you might get nasty surprises when they take your things away.
Think about other options before you file for bankruptcy. One option to consider is credit counseling. You can get the help you need from a variety of non-profit credit counseling companies. They can help you to lower both your debts and interest owed to creditors. You will pay them, and in turn, they will pay the people you owe money to.
If you’re filing for bankruptcy soon, be sure you are going to hire a lawyer. With all the ins and outs of bankruptcies, it can be hard to grasp all the knowledge. Talk to a bankruptcy lawyer, they can help clarify anything that you might have confusion with.
Make your decision wisely when you select a bankruptcy attorney. Many novice lawyers get their feet wet with personal bankruptcy cases. Often times, people choose lawyers that aren’t licensed properly or that don’t have enough experience. Don’t fall victim to this. If you want to check for a proper lawyer, you can use the Internet, ask your friends, or look for a popular lawyer via the Yellow Pages. The idea is that you want to ensure your lawyer’s competency on the issue.
Be sure to weigh all of your options before deciding to file for personal bankruptcy. 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 the ability to negotiate much lower payments, just be sure any debt modifications you agree to are written and that you have a copy.
Make sure that the lawyer you hire is has many years of experience dealing with bankruptcy. There are lots of qualified attorneys from which to choose. While you may be thinking a cheap costing attorney is the way to go, the first thing you should do is determine whether or not they are experienced in bankruptcy.
Judging from the information contained within the article alone, you can now see that there are ways to get out from under the piling debt. However, once this chapter is written it is done and you can begin to start fresh. Try using the tips in this article so you can make bankruptcy into the most positive experience possible.
Know that filing for a Chapter 7 bankruptcy does not guarantee that all your previous debts will be dismissed. Debts that are secured will still need to be repaid but you should be able to negotiate new terms, and not all debts can be eliminated by this filing. Some debts that aren’t dischargeable include child support, student loans, and alimony.