Are your finances a mess? Do you believe that filing for bankruptcy is your only choice? Do not despair, because there are other people in the same boat. Many people, globally, have had to resort to bankruptcy for their financial hardships. The article below discusses some information and tips to help you make sense of bankruptcy.
Credit Card
Don’t think that loading up your credit card with tax debt and then filing for bankruptcy is an answer either. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Remember that if you can discharge the tax you can discharge the debt. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
As bankruptcy appears on the horizon, don’t take your savings or retirement accounts to try to pay off all your bills. Leave your retirement accounts untouched unless there is absolutely no other alternative. While you may have to use a part of your savings, never completely wipe it out which would only leave you in worse financial shape in the future.
When you do meet with a lawyer make sure that they answer all of your questions and that they do not charge you for consultation alone. Nearly all attorneys offer free initial consultations, so you should be able to meet with a few before you make a final hiring decision. Choose to file only if your lawyer has convinced you that this is the best decision. Take your time before you decide to file after you meet with your lawyer. Be sure to talk with a number of lawyers, and compare the information you receive.
See if there is an alternative you can use before declaring bankruptcy. For example, you want to look into credit counseling. This is the best option for small debts. You should also try negotiating a payment plan with your creditors; make sure you get a written agreement of the new payment plans.
Many bankruptcy lawyers offer free consultations, so go to several before choosing one. Be certain to speak with an attorney, not their paralegal or law clerk, since they cannot give legal advice. Considering several different lawyers can help find someone to trust.
Put forth the effort to grasp the distinctions between Chapter 7 and Chapter 13 bankruptcies. Learn the benefits and drawbacks of each type before deciding which is right for you. Do not hesitate to have your lawyer explain any details that seem difficult to grasp. This will help ensure you make the right choice when filing.
Chapter 13
Consider Chapter 13 bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. You can secure your home under Chapter 13 and pay your debts with a payment plan. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.
Don’t forget to enjoy your life once your finances get fixed. It’s easy to be stressed during this time. This stress may lead to something worse like depression, so do what you can to fight that from happening. You must realize that things will get better over time.
Think about any co-debtors you have prior to filing for Chapter 7 bankruptcy. If you choose Chapter 7, you are no longer responsible for joint debts. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
An understanding of your rights is important before filing for bankruptcy. Collectors may try to convince you that your debt can’t be discharged. Only a few debts are immune to bankruptcy. Taxes, student loans and child support would be the major ones. If a debt collector tells you this false information, seek the advice of your bankruptcy attorney. You may also want to report the bill collector to the attorney general’s office.
Before filing for bankruptcy, establish the fact firmly in your mind that you have nothing to be ashamed of. For many people, bankruptcy is a source of guilt and feelings of worthlessness. However, having this feeling about yourself isn’t going to help anybody, and your health could even be compromised. If you are filing for bankruptcy and you are thinking negatively about the situation, make an effort to stop that now.
As stated earlier, many people like you have found the need to file for bankruptcy. Having read this article, you should feel better prepared to navigate this process. Use the information here to help see you through a smooth bankruptcy.
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