Anytime you are faced with the prospects of filing for bankruptcy, it is not a good situation, but there is some light at the end of the tunnel when you get through this process. Bankruptcy is all about giving you a fresh start. Don't look at it as the end of the world; read this article to help you determine how your life will be enhanced by bankruptcy.
You should avoid paying your taxes with credit cards and then immediately file 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. A common rule is that dischargeable tax means dischargeable debt. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
If you can, get a word-of-mouth referral for a lawyer. Bankruptcy attracts a lot of fly-by-night firms that take advantage of desperate people, and a word-of-mouth recommendation makes it more likely that your bankruptcy will go smoothly.
A lot of bankruptcy attorneys will let you have a consultation, so try several out. Always ensure that the person you meet with is a real lawyer, not a legal assistant or paralegal. These people can't give legal advice. Be sure to check out a number of lawyers so that you will find one who is just right for you.
Always weigh your options carefully prior to deciding to dive head first into filing a bankruptcy claim. For example, consumer credit counseling programs can help if your debt isn't too large. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
Don't file for bankruptcy unless it's absolutely necessary. You may well be able to regain control over your debts by consolidating them. The whole process of filing for bankruptcy can be a long, and hard one. It will also make it tough for you to secure credit after your filing is complete. Because of this, you should be sure that bankruptcy is your only option before you file.
Before you choose Chapter 7 bankruptcy, think about what effect that is going to have on any co-signers you have, which are usually close relatives and friends. You will be freed of responsibility for debts that you share if you make a successful Chapter 7 filing. So, in short, if you file bankruptcy, but they do not, they will be held completely responsible for your joint actions.
Filing for Chapter 13 bankruptcy will not prevent auto loans or mortgages from being obtained. Of course, it's difficult. You need to contact your trustee so you can get approved for a new loan. When meeting with the trustee, bring a budget which shows that you will be able to afford the payment on the loan you are trying to get. You will also need to explain why it is necessary for you to take out the loan.
As stated before, unhappy events may have led you to declare bankruptcy. The initial process might be difficult and draining, but there's something special waiting on the other side. In fact, if you apply the ideas and advice given in this article, you can truly make bankruptcy a turning point in your life towards better days.