If your car or other valuable items are about to be repossessed due to back taxes, you are probably quite afraid of what will happen. When you file for personal bankruptcy, you will be able to sort out your finances and end calls from debt collectors. Keep reading to gain useful insight about navigating the process.
Be sure your home is well protected. Filing for bankruptcy doesn?t automatically involve losing your home. Depending on certain conditions, you may very well end up being able to keep your home. If this is not the case, find out more about Homestead Exemptions you might qualify for if you meet certain financial requirements.
Do not think bankruptcy is the answer to getting rid of taxes you owe. Filing for bankruptcy does not exempt you from paying your taxes. This is a little trick they try, assuming that a credit card balance won?t be looked at the same way. However, this is already expressly forbidden in bankruptcy law, and you will be stuck with the taxes and the interest that is accruing on the credit card.
TIP! Don?t give up. You can often have property returned to you.
Write down every one of your debts. The list will be a fundamental element of your bankruptcy petition, and therefore it is important not to omit anything. Be certain to comb through your financial records to ensure the accuracy of the dollar amounts listed. Don?t hurry through this task; the information needs to be correct for you to receive a discharge.
Credit Card
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money. Remember that if you can discharge the tax you can discharge the debt. There isn?t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Look for a reputable bankruptcy attorney in your neighborhood. Find out if the attorney you are interested in offers a free consultation. If possible, collect financial papers and schedule an appointment. If seeing the proper lawyer, he or she will then be able to properly apprise you of all the ins and outs of the proceedings to come.
TIP! Once you get to the stage of talking with a lawyer about your bankruptcy be sure to give them a list of all of your largest debts. You should include loans from friends and family as well as money owed for credit cards, medical expenses and any other loan companies.
If you have recently gone through a bankruptcy, do not rush into taking on new debt. There are lenders out there who will try to tempt you with high interest loans and credit cards which are directed towards people who have gone through the bankruptcy process. Often, these offers come with very high interest rates. If you are not very careful in controlling yourself and your spending, you can find yourself right back deeply in debt where you started.
Don?t assume that all of your debts will automatically be dismissed when you file for Chapter 7 bankruptcy. Secured debt will have to be reaffirmed, meaning you must come up with a brand new agreement which shows a new payment plan, while other debts you cannot discharge. Fines from courts, child support and alimony are examples on non-discharged debt.
Interest Rates
Be sure to list any and all debts that need to be eliminated when you file your bankruptcy paperwork. If you don?t include all your debts, the ones you leave out won?t be covered by the bankruptcy. It is solely your responsibility to ensure all important information is documented. Doing so can help you make sure you don?t end up paying debts that should have been discharged.
TIP! A great tip to avoid filing for bankruptcy is to make sure all your bills are paid on time and if you can, pay over the minimum amount due. Many people only stick to paying the minimum amount due because either they don?t have more or it?s just convenient, but unfortunately this is how a small debt can quickly spiral out of control.
Before you file for personal bankruptcy, weigh all of your options. A lawyer that specializes in bankruptcy law can help advise you of other options, such as repayment plans and reducing interest rates to relieve some of the burden. If foreclosure is imminent, see if your loan can be altered at all through a modification plan. The lender can help your financial situation by getting interest rates lowered, dropping late charges, and in some cases will allow you to pay the loan over a longer period of time. At the end of the day, creditors want to get paid, and sometimes a debt repayment plan is preferable to dealing with a bankrupt debtor.
Don?t lie or try to cover up any facts when you file for bankruptcy. If you withhold information from the court, your petition may be refused. Double check everything you fill out and make sure it is accurate. Doing so helps you demonstrate good faith and facilitates an appropriate outcome.
Bankruptcy can be overwhelming to most people, and can be quite stressful. Look for a good attorney who can help you through the process. Get recommendations and look into other qualifications rather just choosing based on cost alone. The cheapest attorney may not be the best, but the most expensive may not be the best either. Do not choose an attorney until you have interviewed them, checked with the better business bureau and checked their standing with the bar association. You could also sneak into court to watch a real live bankruptcy proceeding to see how that attorney handles the situation.
Familiarize yourself with the bankruptcy code before you file. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn?t mean that the laws will be the same this year. Review the state legislature web site or contact the state legislature office to keep abreast of changes in the law.
TIP! Don?t pay for an attorney consultation and ask him or her anything you want to know. Most lawyers provide a consultation for free, so consult with many of them before picking which one you want to hire.
Some consumers filing for personal bankruptcy think they will struggle to get financing afterwards. That?s partially true, but your credit score may actually increase after filing. To get your credit worthiness back on track, make sure you make timely payments.
Credit Cards
Many people who have filed for bankruptcy, resolve to never use credit or credit cards again. This isn?t necessarily a good strategy to follow since establishing good credit goes hand-in-hand with getting, and handling, credit in a responsible manner. Without using credit cards or other forms of credit, it is nearly impossible to rebuild your credit worthiness. Start with having a single credit card to help you go in the proper direction.
If you plan to file bankruptcy, do not continue using credit cards. You may feel that before filing for bankruptcy you should run out to buy many things beforehand. Doing so will not help you in the eyes of the legal system. Be financially responsible during this time. Start catching on to proper financial habits now so you can avoid bankruptcy again in the future.
TIP! Decide right up front that you are not going to feel embarrassed or ashamed about needing to file bankruptcy. You may need to get credit counseling or simply learn how to balance your budget.
Don?t drag your feet when it comes to filing bankruptcy. Do not avoid your creditors; they will not go away. It is important to decide on a course of action as soon as you begin experiencing financial problems. Your debt can quickly get way too large, and as a result, you may discover that you must foreclose your home or garnish some of your wages. Once you realize that the debt you have is too much for you to handle, start thinking about talking to a bankruptcy attorney, they can guide you throughout the entire process.
Filing bankruptcy should only be considered after the other options have been exhausted. Be wary of debt consolidation companies who can drive you even further into debt. Keep the advice from this piece in mind to help you make smart financial decisions.
tips
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