If you were unfortunate enough to have your property repossessed by the tax man, you should probably consider bankruptcy. Bankruptcy can wreak havoc on credit, but it may be the only way out of your situation. You can find out more about filing for personal bankruptcy, as well as the consequences of this action, by reading the information presented here.
If you are in a position where you are unable to pay your debts, bankruptcy may be the only option for you. If this sounds familiar, you should read up on the bankruptcy laws in your state. Laws differ from one state to the other. For instance, your home might be protected in some states while you might lose it in others. Familiarize yourself with the bankruptcy laws of your state prior to filing.
If you are thinking about paying off your tax obligations with a credit card and then filing bankruptcy, think again. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Rule of thumb is if the tax is dischargeable, then the debt will be dischargeable. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
One of the most important things to remember when filing for bankruptcy is to be honest and truthful every step of the way. As long as you are not hiding income or assets from the courts, you can ensure that there are no difficulties with your petition. This will save you from having your petition dismissed and your debts dropped from re-filing.
When it comes to informing your attorney about your case, don’t be fearful. Many times a lawyer may forget a key detail; therefore, it is important to remind your lawyer of any key information. Ultimately, this is your bankruptcy and your financial future, so never hesitate to advocate on your behalf.
Be as honest as you possibly can when filing for bankruptcy; hiding liabilities or assets will only hurt you in the long run. All of your financial information, be it positive or negative, must be disclosed to those in charge of filing your case. They need to know it all. Don’t hold anything back and formulate a smart strategy to deal with the reality you are facing.
Before declaring bankruptcy, be sure you’ve weighed other options. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You may also find success in negotiating lower payment arrangements yourself, but be certain to get any arrangements with creditors in writing.
Investigate your other alternatives before you decide you have to go with bankruptcy. Many times a consolidation loan will ease your financial struggles. Bankruptcy is a long process that can be stressful. It will also limit your ability to get credit for the next few years. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
As you can see by now, you do have the option of filing bankruptcy. The consequences for your credit make it a last resort in most cases. Protect your assets and avoid even more stress by learning as much as you can before you decide to file.