Just the thought of bankruptcy creeping up on you, can make you fearful to say the least. Growing debt, along with insufficient income to support a family, can make life seem unbearable. If this applies to you, or if you are worried about it happening, this article can help.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. Generally speaking, taxes are not a dischargeable debt. The delays caused by this sort of tactic could leave you owing the IRS a great deal in interest and penalties. Keep in mind that if the tax debt is eligible to be discharged, then the credit card debt is also dischargeable. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
Prior to filing your bankruptcy petition, go over the list of assets that cannot be seized by creditors. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It is vital that you completely understand which assets are protected and which assets can be seized prior to filing bankruptcy. Without reading the list, you may be shocked at which possessions can be taken from you.
It is important to list all your assets and liabilities during the bankruptcy proceeding. Failure to do so will only cause you problems in the end. The person you choose to file with needs to know both the good and bad aspects of your finances. Bankruptcy can be a chance to simplify your finances, but any schemes you employ to conceal the truth can ruin that chance for you.
Before declaring bankruptcy, ensure that all other options have been considered. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. It may also be possible to get lower payments, but if you do, be sure to obtain records for any consensual debt modifications.
Learn and gain a firm grasp of the differences in applying for Chapter 7 bankruptcies versus Chapter 13 bankruptcies. Get a good grasp of the pluses and minuses each type of filing involves by researching both of them extensively. If you don’t understand the information you researched, consult with your attorney about the details before you decide which type of bankruptcy you want to file.
Consider filing a Chapter 13 bankruptcy. You are eligible to file Chapter 13 bankruptcy if your income is reliable and your unsecured debt does not exceed $250,000. Declaring bankruptcy can assist you in consolidating your debt so you can repay it more easily. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Remember, though, that if you fail to make even one payment, the case will be thrown out and you’ll be right back where you started.
Before proceeding with your bankruptcy, it’s a good idea to start spending ample time with the people you care about most. The whole process of filing for bankruptcy is hard. It is often overwhelming, and not quick. Some people may feel embarrassed or feel their self-esteem has taken a beating from it. Some folks tend to stay in the shadows until their case has concluded. Isolating yourself from your loved ones can lead to feelings of depression. Time spent with people who care about you can give you new perspective on your financial situation.
Many people are frightened of bankruptcy, and rightly so. That said, the best antidote to fear is information, and this article has given you that in spades. Use this personal bankruptcy advice as soon as possible and make things better for yourself and your loved ones.