The Good And The Bad Aspects Of Filing For Personal Bankruptcy
Deciding to file for bankruptcy is serious and should be looked at seriously. Keep reading the ideas in the piece that follows in order to understand what you can expect and what ought to go into making such a major decision. Research the topic extensively in advance.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won't work. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So, there's no reason to make use of a credit cards if it will not be discharged in bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement accounts should never be touched if it can be helped. Your savings accounts offer valuable financial security so try to leave them intact.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
See if there is an alternative you can use before declaring bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. In Chapter 7 most of your outstanding accounts will essentially be erased. Your ties with all creditors will get dissolved. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Safeguard your home. Filing for bankruptcy does not guarantee that you will lose your house. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Spend time researching the advantages and disadvantages of filing for each one of these. Ask your bankruptcy lawyer to clarify anything you don't understand before making a final decision about which type of bankruptcy to file.
You could see about filing for Chapter 13 personal bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. However, if you were to miss a payment, the court would dismiss your case right away.
As the preceding article suggests, bankruptcy is not something that magically happens. You must do a wide variety of things correctly. If you follow the advice given here, you'll be able to make sure you have everything in order for when you file bankruptcy.
Do not consider paying off tax debt with credit cards and filing for bankruptcy afterward. It won't work. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. So, there's no reason to make use of a credit cards if it will not be discharged in bankruptcy.
When it appears likely that you will file a petition, do not start spending your last remaining funds on debt repayment. Retirement accounts should never be touched if it can be helped. Your savings accounts offer valuable financial security so try to leave them intact.
If possible obtain a personal recommendation for a bankruptcy lawyer instead of randomly choosing one. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.
See if there is an alternative you can use before declaring bankruptcy. If your debt is relatively low, you may be able to manage it with credit counseling. Also, if you just contact your creditors and speak to them plainly and truthfully, the odds are good that you can negotiate a better payment structure that you can afford.
Before filing for bankruptcy, determine whether Chapter 13 or Chapter 7 is appropriate for your financial situation. In Chapter 7 most of your outstanding accounts will essentially be erased. Your ties with all creditors will get dissolved. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. You need to determine which type of bankruptcy is right for you given your unique financial situation.
Safeguard your home. Filing for bankruptcy does not guarantee that you will lose your house. For instance, if your home value has dropped recently, or even if you happen to hold a second mortgage, you may not necessarily lose the home. You should also examine the possibility of taking a homestead exemption. This could apply if your income falls below the financial threshold.
There are two different kinds of personal bankruptcy you can file for: Chapter 7 and Chapter 13. Spend time researching the advantages and disadvantages of filing for each one of these. Ask your bankruptcy lawyer to clarify anything you don't understand before making a final decision about which type of bankruptcy to file.
You could see about filing for Chapter 13 personal bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Filing for this type of debt will ensure that you can hold onto your real estate and personal property, and will let you develop a consolidation plan to pay off your debts. The plan is usually for a term of three to five years, and a discharge will be granted at the end of that term. However, if you were to miss a payment, the court would dismiss your case right away.
As the preceding article suggests, bankruptcy is not something that magically happens. You must do a wide variety of things correctly. If you follow the advice given here, you'll be able to make sure you have everything in order for when you file bankruptcy.
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