Good Advice On Why You Should Avoid Bankruptcy

It can be very hard to live with a personal bankruptcy filing. You realize how limited you are when it comes to a tight financial situation. Even with a bad credit score, it is still possible to overcome financial hurdles, as you will see if you keep reading.

Don’t pay tax requirements with your credit cards with the thought of starting the bankruptcy process afterward, without doing your research first. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. So, in short, do not use your credit cards to pay off debts right before you file for bankruptcy.

Don’t be afraid to remind your attorney of certain details in your case. Don’t assume that he will remember something you told him weeks ago. Remember that you’re the boss. You’re paying your lawyer, so you should not be afraid to have your say. After all, the quality of your life hangs in the balance.

Try to get a bankruptcy lawyer that your friends recommend, as opposed to someone that you find from the Internet or yellow pages. You want your bankruptcy to go smoothly, and the Internet is rife with fly-by-night companies whose only goal is to prey upon the financially desperate.

Prized Possessions

Determine which assets won’t be seized before filing for bankruptcy. The kinds of assets which may be exempted during bankruptcy proceedings are listed in the Bankruptcy Code. It’s crucial to read that list before filing to see which of your prized possessions can be seized. If you don’t read it, you could have nasty surprises pop up later due to your prized possessions being seized.

You should not have to pay for an initial legal consultation, and such meetings are great opportunities to ask lots of questions. 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. There is no need to offer an immediate hire, so take your time. You have lots of time for consulting with other lawyers.

Learn the newest bankruptcy laws before filing. Bankruptcy laws are always changing, and you need to be aware of any changes so your bankruptcy can be properly filed. To learn how the law has changed recently, go online and check your state’s website, or call the state government and ask them.

Weigh all of your options before declaring bankruptcy. For example, there are credit counseling services that can help you to deal with smaller amounts of debt. You might also be able to negotiate lower payments yourself, but make sure that you get written records of any debt modifications to which you agree.

Chapter 7

There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. All debt will be eliminated with Chapter 7. The ties with the creditor will be broken. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. You need to determine which type of bankruptcy is right for you given your unique financial situation.

Though you may have filed bankruptcy, you are not at the end of your financial life. By demonstrating responsible financial management, (saving money, making payments on time) you can impress creditors and rebuild your credit rating. So start saving and see how much of a change it makes when people view you the next time you go in for a car or home loan.

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