If the IRS has begun repossessing your assets, bankruptcy could be of help. Your credibility with lenders will take a beating, but sometimes bankruptcy is the only thing you can do. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
When people owe more than what can pay, they have the option of filing for bankruptcy. If you have unmanageable debt, you need to familiarize yourself with regional bankruptcy laws. Each state has its own laws regarding personal bankruptcy. For instance, some states protect you from losing your home in a bankruptcy, but others do not. Do not file before learning about the bankruptcy laws in your state.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. Most of the time, you won’t be able to discharge this debt, and you could make things worse with the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. It is pointless to use credit cards if they can be discharged.
Before you proceed with your personal bankruptcy case, review your decisions to be certain that the choice you are making is the right. It is possible to take advantage of other options, like consumer credit counseling. Before you take the drastic move of filling for bankruptcy and living with a long lasting bad credit history, make sure to consider using another way that may not be as damaging to your credit.
If you suspect that bankruptcy filing may be a reality, don’t try to discharge all your debt in advance by emptying your retirement or saving accounts. You should never touch your retirement accounts, unless you have absolutely no choice. You may need to withdraw some funds from your savings account, but don’t take everything that is there as you will be bereft of any financial backup if you do.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. To handle your bankruptcy, you need a trusted attorney, not a shady one that is out to take your money.
You should never give up. You can often have property returned to you. Autos, jewelry and even electronics that have been repossessed, could be returned. You may be able to recover repossessed property if the repossession occurred fewer than 90 days ago. Consult with a lawyer who can advise you on what you need to do to file a petition.
It is possible to keep your home. Filing for bankruptcy doesn’t automatically involve losing your home. Check your home’s current value to see if it has gained equity and get your first and second mortgage papers together. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
It goes without saying that, bankruptcy is always available as an option. Nonetheless, you should remember the negative impact filing for bankruptcy will have on your credit rating. For this reason, filing for personal bankruptcy should be your last resort. Staying informed about how to handle this situation can save a lot of headache and allow someone to keep their valuables.