It?s not uncommon for people to look down on others who choose bankruptcy, but one day find themselves in the same situation. Changing circumstances, like losing a job or divorce, can create a situation where claiming personal bankruptcy is the only choice possible. If this situation proves to be yours, you can help yourself with the contents of this article.
If you are considering personal bankruptcy, determine what brought you to this situation. While unexpected medical bills can?t always be evaded, unrestrained splurging during shopping trips can certainly be avoided. If you find yourself overspending on unnecessary items, consider getting credit counseling.
If you have fears that you will lose your car, ask your lawyer about the possibility of lowering your car payments. In many cases, you can reduce your payment by filing a Chapter 7 petition. You need to have bought your car 910 days before you file, have a loan with high interest and you?re also going to need a good work history.
Credit Card
If it looks like you?re in for a big hit on your taxes, don?t necessarily assume bankruptcy is a way out for you. Some filers pay the taxes that they owe with credit cards and then they file for bankruptcy. This is done with the hope of evading taxes by shifting the balance to a credit card account. However, bankruptcy laws forbid this, and you will be stuck with taxes owed as well as credit card interest.
To re-establish credit after your bankruptcy, think about opening one new line. While this might be hard to do, take a look at secured credit cards to see if they can help. These cards usually have high rates, but the truth is you will likely higher rates anywhere. If you can begin to rebuild your credit slowly, you will eventually be able to completely erase the bad and replace it with the good.
During the bankruptcy process, you will probably speak to your creditors on more than one occasion. If you arrive at any agreements with your creditors, be sure to get them in writing. Your case can be greatly affected by agreements you can come to with debtors, so be sure you obtain any records regarding these agreements.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. Most of the time, you won?t be able to discharge this debt, and you could make things worse with the IRS. If the tax has the ability to be eliminated, the debt can be too. 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.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy might be a good option, so don?t overlook it. If you are receiving money on a regular basis and your unsecured debt is under $250,000, you may be able to file Chapter 13 bankruptcy. Filing a Chapter 13 will let you keep personal items and real estate while you pay down your debt in a consolidation plan. This plan normally lasts from three to five years, in which you?ll be discharged from unsecured debt. Keep in mind that missed payments will trigger dismissal of your case.
Try to get a referral from a trusted source before choosing an attorney to handle your bankruptcy and make sure they have no issues with the state bar or the better business bureau. This type of law is a popular attraction for inexperienced newcomers. Often times, people choose lawyers that aren?t licensed properly or that don?t have enough experience. Don?t fall victim to this. By searching online, you can find background information about lawyers along with client ratings and any disciplinary record an attorney may have.
If you have attempted every option open to you to bring your finances under control, but have been unsuccessful, bankruptcy may be the final option. You should not let it ruin your life though if you find yourself facing this decision. When you read this article, you will find some very valuable information.
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