Bankruptcy is an experience nobody ever expects to happen to them. Situations always change and you are left with the only option, which is bankruptcy, but most importantly you need to understand how to work within this situation. If you are approaching a bankruptcy situation, reviewing the advice presented below may help you understand what happens next.
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 won’t be able to discharge this debt, and you could make things worse with the IRS. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.
Don’t look at bankruptcy as a first step. Look at all the other options you may have first. You have other options available like consumer credit counselling services. If you file for bankruptcy, a mark is permanently left on your credit. Therefore, before you do this, you should utilize all the other options that you have.
Be honest when filing for bankruptcy, because hiding liabilities or assets can only cause trouble to you. Your bankruptcy lawyer has to know every detail of your finances, whether bad or good. Never hide anything, and make sure you come up with a well devised plan for dealing with bankruptcy.
Before filing a bankruptcy claim, make sure that your home is well protected. Losing your home is thought of as common in bankruptcy cases, but it is by no means inevitable. If your home has significantly depreciated in value or you’ve taken a second mortgage, it may be possible to retain possession of your home. You could also check out the homestead exemption. This lets you continue living in your house, depending on whether you meet certain financial requirements.
Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. Go to a reputable website and research the benefits and detriments of each type of bankruptcy. If there is anything that you don’t understand, go over it with your lawyer so that you can make the best decision.
Do not forget to make quality time for friends and family members. The process of bankruptcy can prove particularly brutal. Having to declare bankruptcy leaves many people feeling like a failure. Avoidance of friends of family during the process is not uncommon. However, self imposed isolation will only make you feel even worse about the process and could even lead to depression. So, it is critical that you keep spending time with the ones you love, regardless of the current financial situation.
Make sure bankruptcy is truely your only option before filing. There are many recouses available to help you lower your payments and get back on track. If foreclosure looms, think about getting your loan plan modified. 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. When all is said and done the creditors just want their money, and more often than not will work with you on a repayment plan.
Good advice is important when filing for bankruptcy. This is much easier if you know more about the basics of bankruptcy. This article has given a lot of information, so you can feel less stressed about the situation.