Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Bankruptcy can wreak havoc on credit, but it may be the only way out of your situation. Keep reading to gain a better understanding of the bankruptcy process and of the ramifications of initiating a filing.
Do not attempt to pay your taxes with your credit cards and subsequently file for 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. So it does not help you to put the tax bill on your charge card if you know the debt will be discharged anyway.
Do not use your retirement fund or savings to pay off creditors. Avoid touching your retirement accounts whenever possible. Your savings accounts offer valuable financial security so try to leave them intact.
Do not hesitate to remind your lawyer of any details regarding your case. You should not take for granted that your lawyer will remember every important detail that you have have told him earlier without a reminder. Speak up, because it is your future on the line.
Prior to filing for bankruptcy, discover which assets cannot be seized. The federal statutes covering bankruptcy can tell you exactly which assets are exempt from forfeiture to pay off creditors. Make sure that you carefully look over this list prior to filing to discover if your valuable assets will be seized. Without reading the list, you may be shocked at which possessions can be taken from you.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. Good or bad, you must tell your bankruptcy attorney everything about your financial situation. Being honest is both the right thing to do and, moreover, it is required by law.
Don’t throw in the towel. You may be able to regain property like electronics, jewelry, or a car if they’ve been repossessed by filing for bankruptcy. If the items were repossessed less than three months prior to your filing date, you may be able to recover them. Consult with a lawyer who can help you along with filing the petition.
Don’t pay to for an initial consultation with a bankruptcy attorney, and thoroughly question each candidate. Since most attorneys offer free consultations, meet with a few attorneys before deciding who to hire. Make a decision when all your concerns and questions have been addressed well by one lawyer in particular. After your consultation, take your time to make your decision. So, this gives you plenty of time to consult with several attorneys.
Familiarize yourself with the bankruptcy code before you file. It can be tough to keep up with them on your own, and because they change often, a bankruptcy attorney can help you keep track for the sake of your filing process. To stay up-to-date on these laws, check out your state’s government website.
Prior to declaring bankruptcy you really need to be sure that you’ve exhausted all your other options first. For example, consumer credit counseling programs can help you by renegotiating your debts with your creditors into payments that you can afford. You can also talk to creditors and ask them to lower payments, but be sure to get any debt agreements in writing.
As mentioned earlier, filing a personal bankruptcy is an ever-present alternative. However, it should not be anyone’s first choice because it does not reflect well on credit. Staying informed about how to handle this situation can save a lot of headache and allow someone to keep their valuables.