A lot of folks think that filing for bankruptcy is only something losers do, but change their minds quickly when they are directly affected. Divorce or getting let go from a job can cause a person to look at personal bankruptcy as their sole choice. If this has happened to you, the hints in this article may be of use.
Credit Card
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, you will still owe money to the IRS and have to take care of the interest of your credit cards. Bear this in mind; if the tax can be discharged, then the debt can be as well. So, there is no reason to use your credit card if it will be discharged in the bankruptcy.
Ask yourself if filing for bankruptcy is the right thing to do. There are plenty of other options open to you, like consumer credit counseling. Since your credit history will forever note the bankruptcy, you want to make sure that you have tried everything else before you take an action such as this, in order to minimize the effect it will have with regard to your credit history.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. A great way to rebuild your credit is to apply for a prepaid credit card. When you do this, it shows your determination to fix your credit history. Eventually, you could be able to obtain unsecured credit.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Penalties may include fines, imprisonment or denial of the filing. Don’t hold back information and create a strategy so you can deal with what’s really happening.
Avoid filing for bankruptcy if you make more money than your monthly bills. Sure, bankruptcy can get rid of that debt, but it comes at the price of poor credit for 7-10 years.
Find out about lowering the cost of the payment you pay monthly on your car, if you are afraid of losing it. Chapter 7 bankruptcy is one of the most common and effective. If you meet the criteria specific to your state, it may be a good option to consider.
Understand the rights you have as a bankruptcy filer. There are unscrupulous debt collectors who may suggest that your obligations cannot be included in a bankruptcy. Most loans can be discharged outside of certain things, like child support or loans you are paying back due to student lending. If you are unsure about specific types of debt, check the bankruptcy laws in your state or consult an attorney.
Prior to filing for bankruptcy, purge from your vocabulary the word “shame”. Bankruptcy can sometimes leave people feeling guilty, ashamed and alone. These feelings can cause you to make rash decisions and cause psychological problems. Keep a positive state of mind to deal with your tough financial situation.
Bankruptcy is a difficult and stressful process, and you will need all the help you can get. If you want to protect yourself from stress, see to it that you hire a good attorney. Be sure that you consider more than the expense when you choose a lawyer. Think about quality rather than cost when hiring an attorney. When deciding on an attorney get referrals, contact your better business bureau or get a free consultation from at least three attorneys. If you want to know more about a specific lawyer, attend a court proceeding and see how the attorney handles herself.
Bankruptcy should be considered only as a last option. If life has brought you here, there is no reason to stress yourself out. This article contains many useful tips you need to know about before you make your decision.
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