Personal Bankruptcy And Why It Might Be The Right Choice For You

Finding information about filing personal bankruptcy does not have to be difficult. There are things to do and things to avoid doing just before and following filing bankruptcy. The following article is full of information that may help you know what to do and what not to do around the time of filing bankruptcy.

If you are planning to file for bankruptcy in the near future, dont charge up your credit cards thinking that you wont have to pay back the debt. In many states, there are rules about how much credit card debt and what kind, may be discharged in a bankruptcy. For instance, if you make purchases for luxury items, such as an expensive new TV, within 6 months prior to filing, you may be obligated to pay that amount back. On the other hand, if you used your credit card to purchase groceries, or other necessities, the rules may be different. Be sure to ask your attorney for advice.

Remember you still have to pay taxes on your debts. A lot of people dont realize that even if their debts are discharged in the bankruptcy, they are still responsible to the IRS. The IRS usually does not allow complete forgiveness, although payment plans are common. Make sure to find out what is covered and what is not.

Make sure you have a solid understanding of which debts can be eliminated by bankruptcy, and which ones cannot. Debts like student loans, child support or alimony payments, and taxes, are generally not discharged through bankruptcy. Bankruptcy can help if your wages are being garnished or if you have large unsecured debts, like, credit cards and utility bills.

Dont pay for the consultation with a lawyer who practices bankruptcy law; ask a lot of questions. Most lawyers offer free consultations, so consult with a few before settling on one. Make a choice only if you have received good answers to all the questions and concerns you brought to the table. After the consultation, you are not immediately required to come up with a decision. So you have sufficient time to speak with a number of lawyers.

Exercise

A useful tip for those thinking about using personal bankruptcy as a way out of their financial difficulties is to exercise great care when choosing an attorney. By selecting a practitioner who specializes in bankruptcy and who has handled a large number of such cases, it is possible to ensure the very best outcome and the greatest likelihood of forging a positive financial future.

Exercise extreme caution with your credit cards, if you are headed into bankruptcy. The regulations governing bankruptcy can prevent you from discharging credit card debt in many situations. Cash advances and non-essential charges are particularly vulnerable. Your creditors can and will challenge these items and prevent you from getting rid of that portion of your debt.

If you have recently gone through a bankruptcy, do not rush into taking on new debt. You are likely to receive lots of offers for "fresh start" loans and credit cards pretty quickly after your bankruptcy is complete. It is usually the case that such opportunities are accompanied by high interest charges. If you are not careful, you could end up in the same spot that had you filing for bankruptcy.

You should now be better prepared for the time before, during and after bankruptcy. The information that has been provided to you has been known to help many other debtors in the same situation that you are in. Use it to your benefit and make the right choices with such a big life choice.