Bankruptcy is a difficult decision for anyone to make; however, it is sometimes necessary. Going through this ordeal is easier when equipped with lots of solid advice. Continue reading for good advice from others that have filed for bankruptcy themselves.
Don’t use credit cards to pay your taxes if you’re going to file bankruptcy. Most states do not look at this debt as chargeable, and you could end up owing money to the IRS. A common rule is that dischargeable tax means dischargeable debt. So using your credit card to pay off your tax obligations, then filing for bankruptcy, can actually hurt you instead of help you.
When bankruptcy seem inevitable it is important not to use your retirement funds or emergency savings to pay creditors. Retirement accounts should never be touched if it can be helped. Using your savings is necessary, but decimating it and leaving yourself dangling with no future financial security is not a good idea.
It’s not uncommon to learn soon after bankruptcy that you are unable to get an unsecured credit card easily. If so, apply for a secured credit card. This at least shows you are making an honest attempt at reestablishing your credit worthiness. After using a secured card for a certain amount of time, you might be offered an unsecured card once again.
Don’t pay for an attorney consultation and ask him or her anything you want to know. Free consultations are standard practice among bankruptcy lawyers, so interview multiple candidates before making a final decision. Make your decision after all of your questions have been answered. Take your time before you decide to file after you meet with your lawyer. This allows you time to speak with numerous lawyers.
Safeguard your home. Filing for bankruptcy doesn’t automatically involve losing your home. Whether you get to keep your home depends on a few things, including its value and whether you have debts like a second mortgage or HELOC. There are other options such as a homestead exemption which offers you a chance to remain in your home, depending on whether or not you meed certain financial conditions.
In difficult financial situations, filing for bankruptcy is sometimes unavoidable. The article you just read should have given you some insight and inspiration on how to proceed with your bankruptcy case. By learning from others that have been in the same situation, it will make it easier on you in the long run.