Solid Advice When Searching For Ways To File For Bankruptcy

TIP! A lot of people find themselves needing to file bankruptcy when they are unable to pay their bills. If this sounds familiar, you should read up on the bankruptcy laws in your state.

It can be very complicated to file for personal bankruptcy. There are different kinds of bankruptcy you can file, and the kind you select depends on your individual financial picture and what types of debt you have. The most important step you can take, of course, is to learn what you can about the process before ultimately deciding one way or the other. The following tips can help you get started.

TIP! If you are considering paying your taxes with credit cards and turning around and filing bankruptcy–they are on to you. Most places will not consider the debt dischargeable, meaning you will have to pay the IRS a lot of money.

Don’t use a credit card to pay off your taxes before filing for bankruptcy. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Generally speaking if you can discharge the tax, you can discharge the debt. Thus, it doesn’t make sense to use a credit card when it is going to be discharged when you file for bankruptcy.

TIP! If you are going through a bankruptcy do not fall victim to guilt and pay off debts that you do not need to pay. No matter what you do, do not touch your personal savings unless there is no other option.

Ask yourself if filing for bankruptcy is the right thing to do. You have other choices, including consumer credit counseling. Your credit score will be forever effected by bankruptcy, which is why you should do everything else in your power to resolve matters first.

Unsecured Credit

TIP! Instead of getting your lawyer from the yellow pages or on the Internet, try your hardest to find one with a personal recommendation. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.

Once the bankruptcy is complete, you may find it difficult to receive unsecured credit. If that’s the case, it is beneficial to apply for one or even two secured cards. This will demonstrate that you’re seriously trying to restore your credit. In time, you might be granted unsecured credit again.

TIP! Do not give up. There may still be way to get repossessed items back after you file for bankruptcy.

Avoid paying for a consultation with the bankruptcy attorney, but do ask many questions. Most lawyers offer free consultations, so consult with a few before settling on one. Choose to file only if your lawyer has convinced you that this is the best decision. There is no need to feel rushed to decide to file after you talk with your bankruptcy lawyer. After your consultations, do some additional research on each attorney you consider qualified for the job.

Chapter 7

TIP! Filing bankruptcy under Chapter 13 means you can still get a loan for a car or a mortgage. It is more difficult.

Know the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy completely wipes out your debt. With very few exceptions, the connections between you and your creditors will be severed. But, with Chapter 13, you will be in repayment plan for about 5 years prior to any debts you have being totally dissolved. You need to be aware of the pros and cons of each type of bankruptcy so you can correctly select the best choice for your situation.

TIP! Think about other options before you file for bankruptcy. You should consider credit counseling.

Before ultimately deciding whether or not to file for bankruptcy, be sure to weigh the different options available to you. Consult with a bankruptcy attorney to see if an interest rate reduction or debt repayment plan is an alternative to filing for bankruptcy. Look into loan modification plans if you need to deal with an imminent foreclosure. Lenders can assist you in a lot of ways, by cutting interest rate charges and cutting off late fee charges. They can also lengthen the loan. Many times creditors are happy to work with you to ensure that you will repay your loan.

TIP! Before you file for personal bankruptcy, take great care in paying off your debts. Some bankruptcy rules do not allow you to send money to creditors within three months of filing; this can extend up to a full year if a loved one is involved.

Bankruptcy is not a decision to be taken lightly. If you decide that it makes sens for your financial situation, you can benefit from working with an attorney who is experienced with personal bankruptcy, so that you can make the experience the beginning of your new, clean financial slate.


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