It is not uncommon these days for people to be drowning in debt. Filing chapter 7 or 11 can be the last option for many people. If this is happening to you, then you might want to think about personal bankruptcy. The article below will help you figure out if bankruptcy is right for you.
Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. You will find few states that discharge this kind of debt. You may also wind up owing a lot of money to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. Therefore, you should not pull your credit card out for purchases if it is just going to be discharged during the bankruptcy.
Do not pay your taxes with credit cards that will be canceled when you 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. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. It is pointless to use credit cards if they can be discharged.
You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. In this event, you should attempt to apply for a secured card or two. This will show other people that you’re serious when it comes to having your credit record in order. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. There are some assets that cannot be seized through bankruptcy, and the law lists those assets. It’s crucial to read that list before filing to see which of your prized possessions can be seized. You wouldn’t want to unexpectedly lose any possessions you treasure.
There is hope! Filing a bankruptcy petition might facilitate the return of your property, including cards, electronics or other items that may have been repossessed. You should be able to get your possessions back if they have been taken away from you within 90 days before you filed for bankruptcy. Get help from your lawyer to file a petition so you can get your items back.
You may end up losing more than you bargained for when you file a bankruptcy claim, so be sure that you know just which assets may be taken before filing. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. You wouldn’t want to unexpectedly lose any possessions you treasure.
Be aware of recent changes, if any, in the bankruptcy code. 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. Your state’s legislative offices or website will have up-to-date information about these changes.
When you are looking at a Chapter 7 personal bankruptcy, you may well have debts to worry about for which you share responsibility with another person, such as a spouse, family member, or business partner. Once you file for Chapter 7 bankruptcy protection, you no longer have legal responsibility for debts that you and any co-signers originally agreed to. However, creditors will want to hold your co-signer responsible completely.
Consider filing a Chapter 13 bankruptcy. If your source of income is regular and your unsecured debt is less than a quarter million, Chapter 13 bankruptcy is something you are able to file for. Chapter 13 bankruptcy permits you to remain the owner of your properties, while allowing you to repay your debt using a debt consolidation loan. Expect to make payments for up to 5 years before your unsecured debts are discharged. Remember that if you fail to make any of the payments on time, the court may dismiss your case.
Chose the proper moment to make your move. Timing is important, and that is especially true when filing for bankruptcy. For some debtors, immediate filing is ideal, whereas in other cases, it is smart to hold off until a later time. Consult with an attorney who specializes in bankruptcy so you know when it is a good time to file.
Look at bankruptcy as a chance to mature and take responsibility for your personal finances. It is not uncommon for bankruptcies to elicit feelings of guilt, remorse and embarrassment. Do not let these negative feelings influence your decision. Focusing on the positive during this stressful time is a good strategy for coping with your ordeal.
Clearly, significant resources and assistance can be had by anyone contemplating personal bankruptcy. If you approach it from just the right way and with a crystal clear, aware mind, you will experience the relief you wanted and will help you to get up again.
Bankruptcy should not be filed by anyone who makes more than their bills cost. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.