Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Bankruptcy can have a major effect on credit; but, at times, is the only choice. The article below discusses some of the pros and cons of filing bankruptcy.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. When you are faced with this issue, begin to familiarize yourself with your state’s laws. There are greatly varying laws concerning bankruptcy, so it is important to make sure you are getting the correct information. For instance, in some states, you can’t lose your home to bankruptcy, while in other states, you can. Do you research about legal ins and outs in your state before you begin the bankruptcy process.
Do not attempt to pay your taxes with your credit cards and subsequently file for bankruptcy. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. The rule here is that if you can get the tax discharged then you can get the debt discharged. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
Make sure you’ve exhausted all other options prior to declaring bankruptcy. You have other options available like consumer credit counselling services. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
When it soaks in that filing for personal bankruptcy, don’t use all of your retirement funds, or all of your savings to resolve insolvency or pay creditors. Unless there are no other options, your retirement funds should never be touched. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
One critical element for anyone filing a petition for bankruptcy is to be honest in everything you do. Do not hide any income or assets or go on a spending spree before filing for bankruptcy: the court will find out and will not have a positive opinion of you.
Don’t be afraid to remind your attorney of certain details in your case. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. It is in your best interest to speak out. You are in control of the outcome of your bankruptcy.
Ask those you know if they have an attorney to recommend, instead of finding one on the Internet or in the phone book. There are many companies who take advantage of financial desperation; that is why it is important that you get someone that is trustworthy.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Keeping secrets or trying to outsmart everyone is not a wise move.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Being with the people who you love should be still be a top priority. The process of bankruptcy can seem brutal. It is often overwhelming, and not quick. Some people may feel embarrassed or feel their self-esteem has taken a beating from it. Many people tend to hide until their process is completed. Isolating yourself from your loved ones can lead to feelings of depression. Time spent with people who care about you can give you new perspective on your financial situation.
If you are making more money than you owe, bankruptcy should not even be an option. While filing may seem simple and a way to get out of paying your debts, it does tremendous amounts of long-term harm to your credit report.
Learn about the personal bankruptcy rules before petitioning. When it comes to the code of personal bankruptcy, a large number of loopholes exist that could be troublesome. If the regulations are not followed, your case may be subject to a dismissal order. Spend some time learning about personal bankruptcy. Doing so will pave the way to an easier process.
Consider other options prior to filing for personal bankruptcy. Consider credit counseling. You can get assistance from non-profit companies. These organizations can work with creditors to lower your payments and interest rates. You pay the organization, and they pay creditors for you.
Exercise some caution in repaying your debts when you know a bankruptcy filing in your future. Bankruptcy laws prohibit some creditor payoffs within 90 days of filing. When it comes to family members, a year is the cutoff for payoffs. Do not make a decision about filing until you are aware of all the current rules regarding bankruptcy.
List any debt you have. Your debts in particular will serve as the basis of your claim. Every single debt you have will need to be listed here. Review your records to determine the precise amounts that you owe. Don’t speed through this step; to get the correct sums discharged, it behooves you to get the amounts correct.
If you cannot qualify for a Homestead Exemption once you have filed for Chapter 7 bankruptcy, try filing for Chapter 13 as well. In some situations it might be better if you convert the whole Chapter 7 bankruptcy into Chapter 13. In this case, you should consult with your attorney to decide on your next step.
In conclusion, the option of bankruptcy is always there. Given that fact, it should be your last resort due to the consequences involved. Protect your assets and avoid even more stress by learning as much as you can before you decide to file.