Before you file for bankruptcy, make sure you have considered all your options. Bankruptcy is often a dire sign in a person’s financial life, and can cause significant embarrassment and shame. Use the tips in this article to help you avoid bankruptcy so you can save yourself from all that trouble.
If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.
After filing for bankruptcy, you may have difficulty getting approved for unsecured credit. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This demonstrates to creditors that you are making a good faith effort to repair your credit. After a while, you may be able to get unsecured credit again.
When a bankruptcy is imminent, retain a lawyer immediately. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. An attorney that specializes in personal bankruptcy, can help guide you and make sure that your filing happens properly.
Before you file, make sure you understand current bankruptcy laws. 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 will have a website to check, or a number you can call, to learn the latest changes in the bankruptcy laws.
Make sure bankruptcy is truely your only option before filing. 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. Loan modification plans can be helpful for those facing foreclosure. The lender wants their money, so they may be willing to forgive some fees, change the loan term or reduce interest as ways of assisting you. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
If your vehicle is in question, perhaps your attorney can assist in lowering your payments. Filing under Chapter 7 is usually a good way to 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.
Avoid large cash advances from credit cards when considering bankruptcy. You may think these debts will just be washed clean, but you are wrong. That is considered fraudulent behavior, and you can still have to pay the credit card back, bankruptcy or no.
Adopt a positive attitude toward filing for bankruptcy and researching the topic. It’s very difficult admitting you need help, but waiting too long can actually make it worse. Talk to a lawyer as soon as you can to get the advice that you need.
It is possible that a bankruptcy might actually be smarter over the long term than struggling month to month with consistently late or missing payments. While bankruptcy will haunt your credit history for up to ten years, your damaged credit will start healing right away. In other words, bankruptcy can give you an opportunity to start over if handled correctly.
Every single asset is not necessarily lost when you file for bankruptcy. Many times you will be allowed to keep your personal property. Whether jewelry, furnishings, electronics and even clothes – these items can be protected. It will be dependent on your own personal circumstances and the laws in your state, but you might also be able to keep your house and care.
Choosing a good lawyer is an important step in the process. This area of law attracts some inexperienced amateurs. The lawyer you choose will need to be experienced and licensed. If you want to check for a proper lawyer, you can use the Internet, ask your friends, or look for a popular lawyer via the Yellow Pages. The idea is that you want to ensure your lawyer’s competency on the issue.
As you have learned, bankruptcy can be avoided. By using this article you will be well on your way to avoiding bankruptcy. Apply the tips from this article to make positive changes to your life and financial situation.