It is very upsetting to be completely overwhelmed by debt. There are times that having a small financial problem turns into a huge one. Unfortunately, once you're in this situation, fixing it can be hard. This article will help you decide if bankruptcy is the way to resolve your debt problems, and if it is, give you some tips for navigating the process.
Don't use a credit card to pay off your taxes before filing for bankruptcy. Credit card debt is handled charge by charge during bankruptcy, and in most states, tax debt cannot be discharged through bankruptcy. A common rule is that dischargeable tax means dischargeable debt. There isn't any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
Do not try to get clever by paying your taxes via credit card before you declare bankruptcy in an effort to dodge your tax burden. The fact is that the credit card debt will be ineligible for discharge, and your tax debt may increase. Transferring the debt to another medium (e.g. a credit card) won't magically make a tax debt discharagable, either. So as you can see, in this situation there is no need to use the card when the debt will be discharged when you file for bankruptcy.
If you are truly faced with bankruptcy, avoid blowing your savings or retirement money, trying to pay off debts. Retirement accounts should never be touched if it can be helped. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
Stay abreast of new laws that may affect your bankruptcy if you decide to file. These laws change regularly and you should stay up-to-date so you can make the best decisions. Check the website of your state's legislation or get in contact with your local office to learn more about these important changes.
licensed money lender singapore Protect your house. Bankruptcy filings do not necessarily mean that you have to lose your house. If your home has significantly depreciated in value or you've taken a second mortgage, it may be possible to retain possession of your home. Otherwise, there is a homestead exemption you should look into, as it might let you stay in your house.
It is important to understand clearly the benefits of a Chapter 7 or 13 bankruptcy. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. Before making any decisions, discuss the information you have learned with your lawyer.
Before filing for bankruptcy ensure that the need is there. Consolidation could be the avenue you need to get your finances back in order. Filling for bankruptcy could be a long and stressful process. Credit will be much harder for you to come by after you file for bankruptcy. You only want to file for bankruptcy after you have exhausted your other options for dealing with your debts.
Sometimes, financial crises just take place in your life and you do not have the chance to do much about them. Use what you learned from this article to regain control of your financial situation. Use the advice that you have been given to make some changes in your life.