There is no one that goes through life expecting to experience bankruptcy. Changing circumstances often create a situation where there is no better choice, and knowing how to deal with it is important. The information presented here will help you when the sort of circumstances present themselves.
Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. This makes using a credit care irrelevant, since bankruptcy will discharge it.
When it gets time to think about bankruptcy, avoid using your retirement or savings to pay off the creditors or even make attempts to settle the debt. Don’t touch retirement accounts unless you don’t have a choice. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. If this is so, apply for a secured card or two. By doing this, you will be letting people know that you want to fix your credit score. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. To stay up-to-date on these laws, check out your state’s government website.
Before filing a bankruptcy claim, make sure that your home is well protected. Filing for bankruptcy does not mean you have to lose your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, look into the homestead exemption which may allow you to stay in your home if you meet financial threshold requirements.
Understand the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
If you decide you need to file bankruptcy, it is important that you have helpful advice. The process is anything but simple, and information will become your best friend during this difficult time. With the tips from this article, you should be well-prepared to handle anything bankruptcy related.