Filing for personal bankruptcy is quite a complicated process. For example, there are several types of bankruptcies. Each type depends on several factors including your income as well as your debts. Research into what will best suit you is important before you consider filing. In the following paragraphs, you’ll find some tips that will get you off to a good start.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Most of the time, you cannot discharge this debt. As a result, you will owe the IRS a lot of money. If the tax can be discharged, so can the debt. 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.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. Generally speaking if you can discharge the tax, you can discharge the debt. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. This being the case, look at secured card options. You can exhibit your desire to rebuild your credit this way. If you pay your secured card off on time, you’ll eventually find that companies will start offering you unsecured credit.
Most bankruptcy lawyers give free consultation, so try to meet with these types of lawyers before deciding on hiring one. Be certain that the person you meet with is really a lawyer. Avoid meeting with paralegals or legal assistants because they cannot give you legal advice. Comparing different lawyers makes it possible to find one with whom you work well.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Research them online to see the positive and negative aspects of each one. Once you have done your own research, be sure to review your findings with your lawyer, who is the expert. This way, you can be sure of making a well informed choice.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If you find that to be the situation, consider requesting secured cards. You can exhibit your desire to rebuild your credit this way. Unsecured credit may be offered to you quicker than you think after doing so.
Consider filing using chapter 13 bankruptcy. If you have less than a quarter of a million dollars in debt that is unsecured and a regular income, you are eligible to file a Chapter 13. You can keep personal possessions, as well as real estate, while paying into a debt consolidation system. The window for Chapter 13 repayments is typically 3-5 years. At the end of this time, any unsecured debt is discharged. Missing a payment under these plans can result in total dismissal by the courts.
When filing for bankruptcy it is crucial that you are candid and not concealing any liabilities or assets, as it will only show up in the future. When you file make sure whoever is handling the process is fully aware of each and every financial detail. Be completely honest in your paperwork to avoid a situation that may end in severe punishment.
Once your initial filing is complete, it is time to take some time to relax a little. Many people who undergo this process become way too stressed out. You do not want to have to deal with depression in addition to your financial troubles, so you should take steps to keep yourself happy. Life will get better after you finally get this situation over with.
As this piece suggests, personal bankruptcies come in different packages. Do not be overwhelmed by the voluminous information available. Take some time to think about the tips you have read here and how they apply to your situation. Doing this will allow all the information to be processed and benefit your decision making going forward.
It is important that you know about bankruptcy before you decide to go for it. Though it can cause a negative effect to your credit score, it has a couple of advantages to your finances.