It’s not fun to file bankruptcy. Bankruptcy can mean bad things and it is usually an embarrassing thing to mention to people when they ask about your financial status. This article can help you deal with bankruptcy in the best way possible.
Do not use a credit card to manage your tax issues and then try to file bankruptcy. Generally, this type of debt is not covered by bankruptcy filing, and you will still have a large debt owing to the IRS. Transferring the debt to another medium (e.g. a credit card) won’t magically make a tax debt discharagable, either. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Think through your decision to file for bankruptcy carefully before going ahead with it. There are other options available, such as credit counseling for consumers. Bankruptcy stays on your credit for a whole decade, so if there are less drastic options that will solve your credit problems, it is in your best interest to make use of them.
Be aware that getting unsecured credit is going to be tough once you’ve gone through bankruptcy. Since it is important that you work to rebuild your credit, you should instead think about applying for a secured card. This demonstrates to creditors that you are making a good faith effort to repair your credit. Eventually, you could be able to obtain unsecured credit.
When looking for a lawyer to handle your bankruptcy claim, the best way to go is off of a personal recommendation instead of simply flipping through the phone book. Don’t be taken in by some fly-by-night company that exists only to profit from the suffering of others. Check out any lawyer you are considering thoroughly before engaging him or her.
Learn the differences between Chapter 7 and Chapter 13 bankruptcies. If you file for Chapter 7 bankruptcy, all of your debts will be eliminated. This type of bankruptcy ends any relationship you might have with creditors. In a Chapter 13, though, you’ll be put on a payment plan for up to 60 months before being free of your debts. Both options have advantages and drawbacks, so do your research before deciding.
As this solid advice demonstrates, there are other options besides bankruptcy. These tips can help you avoid bankruptcy. Use the information in this article to change your financial future and never have to worry about credit again.