When a person has to file bankruptcy, they may feel anger or frustration. Those who experience it are stuck worrying about how they can pay their debts while being able to live day to day, or so they think. However, no one is really stuck with regards to personal bankruptcy; you will learn that in this article.
You should avoid paying your taxes with credit cards and then immediately file for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. Generally speaking, debt incurred to pay taxes and the tax bills themselves are treated the same in a bankruptcy. There isn’t any reason to use a credit card to pay the tax bill since the bill can be discharged anyway.
A key tip for those filing a personal bankruptcy petition is to always be completely honest in all documentation. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you’re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
It is important to remind your lawyer of any details that may be important to your case. Don’t just assume that the attorney will remember it automatically. Speak up if something is troubling you, as this is your future we are talking about here.
Look at all of your options prior to deciding to file for bankruptcy. Find out if you can receive a reduced interest rate or altered repayment plan instead of bankruptcy filing. If you are looking at foreclosure, think about a loan modification program. This type of plan allows your lender to work with you eliminating charges, extending your loan, and lowering interest rates to help you pay back the loan without drowning in debt. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
Many people file for bankruptcy every year, mainly because the economy is bad for everyone. Apply what you’ve learned here today and make wise decisions about bankruptcy going forward.
