Handy Tips On When You Should File For Bankruptcy

Anything leading you to going through bankruptcy is not a happy tale, but the life you live after might be. You are being given the opportunity to start again with a debt-free slate. The article you’re about to read contains great information on bankruptcy and how you can proceed with filing a claim.

Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Bear this in mind; if the tax can be discharged, then the debt can be as well. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.

TIP! Before you file for bankruptcy, carefully consider if it is the right option for you. You can find services like counseling for credit that consumers can use.

Although you can find many bankruptcy attorneys listed in your local Yellow Pages or online, it’s best if you can find one through the personal recommendation of a friend, family member or acquaintance. There are way too many people ready to take advantage of financially-strapped individuals, so you must ascertain that your attorney can be trusted.

Before making your decision to file for bankruptcy, double-check to see if other, less drastic options could make sense. One example would be that a consumer credit program for counseling if you have small debts. You may have luck negotiating lower payments by dealing directly with creditors, but be sure to document any get and new agreement terms in writing from each creditor.

TIP! You might find it difficult to obtain an unsecured credit card or line after emerging from bankruptcy. If that’s the case, it is beneficial to apply for one or even two secured cards.

Chapter 7

There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. In Chapter 7 most of your outstanding accounts will essentially be erased. All the things that tie you to creditors will go away. Chapter 13, on the other hand, involves a five year payment period before any remaining debts are cancelled. It’s imperative that you know the differences among the various categories of bankruptcy so that you are able to choose the wisest one for you.

TIP! Be honest when filing for bankruptcy. Don’t hide liabilities or assets, as they’ll come back and haunt you.

Spend time with friends and family to keep your stress levels to a minimum through the bankruptcy filing process. Bankruptcy can really wear down your emotional reserves. It is long, full of stress and leaves individuals having feelings of shame and guilt. Lots of people choose to disappear for a while until the entire process is over and done with. But, isolating yourself from others could bring out more depression. So, it is critical that you spend what quality hours you can with loved ones, regardless of your financial circumstances.

In conclusion, most circumstance that lead to bankruptcy are not positive. That said, filing for bankruptcy can be a positive turning point in your life. Try using the tips in this article so you can make bankruptcy into the most positive experience possible.

TIP! Do not abandon hope. If you’ve had collateral, such as a car, electronics, or jewelry repossessed for non-payment, you might be able to recover the property when you file for bankruptcy.