Is Bankruptcy The Best Option For You?

TIP! Generally bankruptcy is filed when a person is facing insurmountable debt. If this applies to you, be sure that you know what the laws of your state are.

It is easy for people to dismiss bankruptcy as an option for failures, until they are confronted with the need themselves. You never know what is going to change in your life. For example, you could lose your job or get divorced from your spouse, which could cause you to be forced to claim bankruptcy. If filing for bankruptcy is your only choice, educate yourself on the process.

Credit Card

TIP! Don’t look at bankruptcy as a first step. Look at all the other options you may have first.

You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.

TIP! Avoid exhausting your savings or emptying your retirement accounts to pay off creditors if you are considering filing for bankruptcy. You should not use your retirement savings unless the situation calls for it.

Do not use your retirement fund or savings to pay off creditors. Do not tap retirement accounts unless there is no other alternative. Although you may need to tap into your savings, you should not use up all of it right now and jeopardize the financial security of your future.

TIP! Never lie about anything in your bankruptcy petition. Remember that if you hide your valuable assets or income from your bankruptcy trustee, you may risk a number of penalties and complications.

Never give up. Many times you can get repossess property back once bankruptcy has been filed. If you have any property in repossession that was taken less than three months before filing for bankruptcy, then there are good odds that you can get your property back. A lawyer will be able to assist you with filing the paperwork to get the items back.

Filing Bankruptcy

TIP! Safeguard your most valuable asset–your home. Bankruptcy doesn’t always mean you’ll lose your home.

If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. There are many different aspects to filing bankruptcy, and you may not understand everything there is to know. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.

TIP! Be sure you have no other choice but to seek bankruptcy. Many times a consolidation loan will ease your financial struggles.

Since it is possible to obtain a free consultation from the majority of bankruptcy lawyers, meet with a few of them prior to choosing one. Make sure that you meet with an actual lawyer and not an assistant or paralegal, as these people are not allowed to provide legal advice. Look for a lawyer who you can relate to.

Unsecured Debt

TIP! Investigate other alternatives before resorting to bankruptcy. There are many recouses available to help you lower your payments and get back on track.

Consider filing for Chapter 13 bankruptcy. If you have regular income and under $250K in unsecured debt, a Chapter 13 may be right for you. By filing this way, you can hold onto your home and property, while repaying debts through debt consolidation. Lasting anywhere from three to five years, this plan will allow you to be discharged from unsecured debt. Missing a payment under these plans can result in total dismissal by the courts.

TIP! Before going through the Chapter 7 filing process, ensure that your co-debtors are abreast of any implications relating to this process. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing.

Speak with your attorney about ways you can keep your car. In many cases, Chapter 7 bankruptcy can lower your payments. For instance, you can get lower payments on you car if you purchased it before filing and took a loan with high interests on it.

TIP! Before declaring bankruptcy, it is important to know your rights. Certain unscrupulous creditors will try to convince you that certain debts can’t be discharged in bankruptcy.

If you have tried everything you can think of to resolve your financial difficulties, filing for personal bankruptcy may be your only option. You should not let it ruin your life though if you find yourself facing this decision. This article will offer you some helpful information.

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