Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. 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. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Just thinking about bankruptcy can frighten people. Growing debt loads combined with continuous family obligations can cause an incredible financial strain. If these circumstances sound familiar, you stand to benefit from the tips that follow.
Seek a less serious option prior to filing for 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. It is also possible to do your own debt negotiations; however, be sure to get everything in writing.
Before you file for bankruptcy, find out which of your assets will be exempt from seizure. The Bankruptcy Code provides a list of all the different kinds of assets that you can exclude. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you neglect this important step, you might be blindsided when a possession that is important to you is taken to repay creditors.
Make sure bankruptcy is truely your only option before filing. There are many recouses available to help you lower your payments and get back on track. Loan modification plans on home loans are a great example of this. 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. Because of the fact that creditors would like to see their money they are likely to offer repayment plans versus not getting paid at all if you file for bankruptcy.
There is hope! If you file for bankruptcy, you might be able to reclaim certain property that has been repossessed, such as your car, electronics or jewelry. Filing for bankruptcy may allow you to regain ownership of recently repossessed property. Discuss your options with a good lawyer who can help you with the filing of your bankruptcy petition.
When filing for personal bankruptcy you should always be aware of your rights. Some debtors will try to tell you your debt with them can not be bankrupted. There are not many debts that can not be bankrupted, student loans and child support for example. If these are not the categories in which your debts fall, double check to see if the type of debt can be bankrupted. If it can, be sure to file a complaint about the debt collector with the office of the state attorney general.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire. Don’t hire an attorney who fails to address all your concerns and questions. You need not decide right away. You can take as much time as you need to meet with different lawyers.
When you are going through bankruptcy proceedings, it is sure to cause a great deal of stress. To avoid getting too stressed, make sure you hire a reputable bankruptcy attorney. Do not hire based on cost. The cheapest attorney may not be the best, but the most expensive may not be the best either. Get referrals from people you know who have been in your situation, check with the better business bureau and use free consultations to interview several people. You could even attend a court hearing to see how an attorney handles his case.
See if there is an alternative you can use before declaring bankruptcy. For example, consumer credit counseling services can often help you figure out a workable repayment plan with creditors. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
Do not pay off debts blindly before you file a personal bankruptcy. There are bankruptcy laws which forbid repayment of some creditors within three months before filing. In the case of family members, this period of time may extend to a full year. Study applicable regulations prior to making any financial choices.
Before you file, you have to quickly think to be more responsible fiscally. You must not doing anything that will raise your current level of indebtedness for several months before filing a bankruptcy petition. Both creditors and judges take a look at what you are doing now, as well as what you have done in the past. Try demonstrating that your current behavior and financial habits have positively changed.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. With very few exceptions, the connections between you and your creditors will be severed. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You have to know what differs between all of the kind of bankruptcy, so you know which is one is ideal for you.
When you fill out the papers for filing bankruptcy, be sure to list every debt that you want to have eliminated. Any debts omitted from the paperwork will not be covered in the discharge. You will be the only one responsible for including all of your debts. Any that are not included, cannot be discharged.
It is not unusual for people to be worried about bankruptcy; the process is nerve-wracking. Now that you have read this article, you now never again have to be scared of bankruptcy. Take this advice to heart, and do everything possible to improve your situation.
If you cannot qualify for a Homestead Exemption once you have filed for Chapter 7 bankruptcy, try filing for Chapter 13 as well. It might even be better to convert from a Chapter 7 to a Chapter 13; talk to your lawyer about this.