What To Know Before You File For Bankruptcy

In today’s times, bankruptcy is not as rare as it has been at times in the past. Many people can thank the economy for that! You need to educate yourself so that you can make wise decisions when it comes to filing bankruptcy. This article will help you to make the best choices.

Millions of Americans file for bankruptcy each year because they can not pay their bills. If this describes your situation, it makes sense to become familiar with relevant laws. Each state has its own set of rules regarding bankruptcy. In certain states if you file for bankruptcy your home remains protected, but the laws vary depending on where you reside. It is important to understand the laws in your state before filing for bankruptcy.

Do not even think about paying your taxes with credit and petitioning for bankruptcy right after. In many areas of the country, this debt will not be dischargeable, and you could be left owing a significant amount to the IRS. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. This makes using a credit care irrelevant, since bankruptcy will discharge it.

Unsecured Credit

After a bankruptcy, you may still see problems getting any kind of unsecured credit. If that is the case, you should try applying for one, or two secured cards. This at least shows you are making an honest attempt at reestablishing your credit worthiness. Once you’ve built up a history of on-time payments, you may start getting unsecured credit again.

Keep working to improve your situation. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. Any property repossessed within 90 days before filing bankruptcy, may be able to be returned to you. Get help from your lawyer to file a petition so you can get your items back.

Speak to a bankruptcy attorney about what new laws may be going into effect before your bankruptcy filing. Laws are ever-evolving. You must stay current with bankruptcy laws if you want to be successful in your challenge. Keep up with your current state’s laws and regulations to figure out what steps you should take.

Consider Chapter 13 bankruptcy. You are probably eligible for Chapter 13 if your income is consistent and your unsecured debt is under $250,000. Not only can you repay your debts through consolidation, personal property can be kept, as well as real estate. Typically, this goes on for roughly three to five years, and once this time has expired, your unsecured debt is eliminated. Bear in mind that if you miss a single payment that is due under your plan, the entire case will be dismissed by the Court.

When your income surpasses your bills, you should not be filing bankruptcy. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.

As this article stated, the subject of bankruptcy is on many people’s minds nowadays, due to the economy. In order to ensure the best decisions are made, use the tips in this article.