When your debts get out of control, it’s common to start worrying about losing your possessions and assets that you care about most. Declaring personal bankruptcy can stop harassment from debt collection agencies and provide you with a fresh start for getting your finances on the right track. The following article contains advice to assist you in dealing with the process.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This will be a demonstration of the seriousness with which you view rebuilding your credit rating. If you do well with a secured card and make strides to repair your credit, you will ultimately be able to receive an unsecured card.
Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. When you arrive at a consultation ask plenty of questions. You should also seek free consultations from several attorneys prior to choosing one. Choose an attorney who is experienced, educated and well-versed in bankruptcy laws. Take your time before you decide to file after you meet with your lawyer. That gives you the chance to speak to a number of lawyers.
Before making the decision to file for bankruptcy, be sure you have considered alternative options. For example, if your debt is small, try a type of consumer counseling program. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Be certain to grasp the distinction between Chapter 7 and Chapter 13 bankruptcy cases. Chapter 7 is the best option to erase your debts for good. You will be removed from any contracts you have with your creditors. If you file for Chapter 13 bankruptcy, however, you will enter into a 60 month repayment plan before your debts are completely dissolved. It is worth while to take your time to research both types of bankruptcy to decide which option works best for you, and your financial situation.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Research both types of bankruptcy online, and weigh the positives and negatives each would offer you. Ask your bankruptcy lawyer to clarify anything you don’t understand before making a final decision about which type of bankruptcy to file.
Don’t file for bankruptcy without knowing your rights. Bill collectors will lie to you and say you can’t have their bill discharged. Few debts exist that are not covered by bankruptcy, such as student loans or child support. If you are told differently by a collector, research the information yourself. If you find they are in error, get the name of their company, phone number and any identifying info so you can report it to the attorney general in your area.
Facing bankruptcy is not a fun situation and cause a lot of stress and anxiety. To have a reliable and trustworthy guide through the process, find a highly qualified attorney. Try not to pick a lawyer based on cost alone. Choosing a lawyer should be based on finding one with a proven track record who can give you the help that you need. Speak with trusted people, check the BBB and take advantage of the free bankruptcy attorney consultations. It is even possible to watch a court hearing in order to see how well an attorney handles a case.
Do your homework so you thoroughly understand the laws pertaining to bankruptcy before you file. Did you know that in some areas, you cannot transfer assets from yourself to another person in the year previous to filing occurring? In addition, it’s unlawful for a filer to acquire more debt on their credit cards before they file.
Consider any other options available before filing for personal bankruptcy. One option to consider is credit counseling. Various non-profit companies are out there to give you assistance. They will make arrangements with your creditors so you will have lower payments as well as lower interest rates. They act as intermediaries between you and your creditors; you pay the counselors and they pay the companies to which you owe money.
Watch how debts are paid off prior to filing. Bankruptcy rules generally outlaw repayment of creditors in the 90 days leading up to a bankruptcy filing, a period that is extended to one year when it comes to payments made to family members. Read up on the rules before you make any decisions about your finances.
Do not doddle with whether or not bankruptcy is for you. It can be difficult to admit you’re in need of help, but your debt will only grow larger if you put off your decision. Speaking with someone knowledgeable as soon as you can helps get you started on the bankruptcy process before your situation becomes any worse.
Although bankruptcy is an available option, it is best you look for alternative solutions first. Be careful, because many services offering debt consolidation are scams, and can leave you deeper in debt than you were already. Keep these tips in mind to make the best choices for your financial future and to avoid worsening your debt.