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Bankruptcy: What You Need To Know

by rhealurlinesara

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Once you are faced with the possibility of losing treasured items like jewelry or cars, this can make you shy away from the IRS. End calls from debt collectors and gain control over your finances by filing for bankruptcy. The following article contains advice to assist you in dealing with the process.

Don't use a credit card to pay off your taxes before filing 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. Generally speaking if you can discharge the tax, you can discharge the debt. This makes using a credit care irrelevant, since bankruptcy will discharge it.

Use a personally recommended bankruptcy attorney instead of one found through the Internet or phone books. There are so many dime-a-dozen companies out there who make it a practice of preying on financial desperation. You need to make sure your bankruptcy goes smoothly, so find someone you know you can trust.

Before filing a bankruptcy claim, make sure that your home is well protected. Bankruptcy doesn't always mean you'll lose 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. If you're not sure, however, you can always study the particular homestead exemption regulations. You will learn everything you need to know. Read more on

Learn how Chapter 7 bankruptcy and Chapter 13 bankruptcy differ from each other. By researching each type, you can begin to understand which method is right for you. Go to a specialized lawyer to ask your questions and get some useful advice on what to do.

If you are making more money than you owe, bankruptcy should not even be an option. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.

Don't wait until the last minute to file bankruptcy. It is a big mistake to avoid financial problems, thinking they may go away on their own. Debt can snowball very fast, and by ignoring it, you increase the chances of worse problems, such as foreclosure and wage garnishments. As soon as you realize your debts far outweigh your income, call a bankruptcy lawyer to talk about what your choices are.

Prior to filing, it is important that you know all about bankruptcy laws. There are often laws prohibiting the transfer of money from the filer for a certain period preceding the bankruptcy filing. Moreover, a filer is prohibited from spending or incurring extra debt prior to their bankruptcy filing.

Make a list of all your debts before filing. If you forget any items, your filing could be rejected. You might think something is insignificant, but you should add it anyway. Financial information should include all income, assets and loans.

Write down a list of every debt you have. You'll need to know all your debts to file for bankruptcy. Always go through your statements and get exact numbers. This process should not be rushed; the numbers should be exact.

Don't stop the the bankruptcy process if you find a job. Bankruptcy may be the solution for you, even with your changed circumstances. When you decide to file for bankruptcy makes a huge difference. If your filing is done before you earn a new income, you can calculate repayment means without taking that into account.

No matter how bleak the situation; always be honest. It's a big mistake to lie about your financial situation or your assets. This not only unethical, it is simply illegal. If you fail to declare certain assets or debts, you may be held criminally liable for the omission if it was found to be intentional.

If you cannot use the Homestead Exemption within the Chapter 7 bankruptcy laws, find out if you can file a Chapter 13 bankruptcy with your mortgage. There may be situations in which it makes more sense to convert a Chapter 7 case to a Chapter 13, but it is important to discuss such a strategy with your lawyer.

Although personal bankruptcy is always an option, do not pursue this before looking into other avenues. Be wary of debt consolidation services, some of these services are scams and are only after your money. Take what you've just learned to heart, and make wise financial decisions going forward.

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