Simply mentioning the word bankruptcy can cause people to become nervous and worried. A lot of debt and not being able to support your family can be real frightening. If you’re frightened by bankruptcy, or are living with its effects, you’ll find helpful advice in the following paragraphs.
Don’t use a credit card to pay off your taxes before filing for bankruptcy. 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. If the tax has the ability to be eliminated, the debt can be too. This makes using a credit care irrelevant, since bankruptcy will discharge it.
You might experience trouble with getting unsecured credit after filing for bankruptcy. If this is so, apply for a secured card or two. This will allow you to start building a good credit history while minimizing the bank’s risk. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Don’t file for bankruptcy until you know what assets of yours can and can’t be seized. Check the bankruptcy laws in your state to find out if certain items are excluded from your bankruptcy filing. It is vital that you know the things on this list prior to filing for bankruptcy, in order to determine which of your possessions will be taken away. If you fail to do so, things could get ugly.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. Bankruptcy law has changed substantially in recent years, and therefore you must understand how such changes may affect your situation. If you are not sure about the current laws all you have to do is look into what laws have been passed.
Take the time to find a simpler solution to your financial issues, before filing for bankruptcy. If your debts are really not overwhelming, you may find the assistance you need by consulting a consumer credit counselor. Some creditors will work with you to help you pay off your debt with lower interest rates, lower late fees, or an extended loan period.
There are two types of bankruptcy filing, Chapter 7 and Chapter 13 so make sure you know the differences. In Chapter 7 bankruptcy, your debts are all eliminated. Any debts that you owe to creditors will be wiped clean. If you file using chapter 13 bankruptcy, you will go through a sixty month repayment plan prior to all your debts being completely dissolved. It is important that you understand the differences between the different types of bankruptcy, so that you can decide which option is best for you.
Those who are afraid of bankruptcy are entirely justified; it often can be a frightening experience. However, bankruptcy is not the end of the world, and this article is here to help you understand how not to be overwhelmed by it. By using the tips and information you’ve gathered here, you will be able to face your fear head on and look forward to a brighter financial future.