Bankruptcy: Tips To Get Through It Painlessly!

Anyone who has had a personal possession, such as a car, repossessed by the IRS should consider bankruptcy. Although bankruptcy takes a major toll on credit, sometimes, it is the only option. The advice below will provide you with all the information you need to understand the results of choosing to file for bankruptcy.

Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you’re in this situation, learn about the laws where you live. Bankruptcy laws vary from state to state so it is important to do your research. For instance, in some states you can keep your home and car, while other states prohibit this. It is important to understand the laws in your state before filing for bankruptcy.

Before declaring bankruptcy, ensure that all other options have been considered. Those with smaller debts may find use in a program for consumer credit counseling. You could even negotiate for lower payments. However, you should ensure that you always obtain a written record of all the changes to your debt that you’ve agreed to.

You could see about filing for Chapter 13 personal bankruptcy. With a regular income and unsecured debt below $250,000, Chapter 13 is probably best for you. This allows you to keep possession of your real estate and property and repay your debt through a debt plan. Generally, this stays in effect for up to 5 years. Afterwards, your unsecured debts clear from your accounts. Remember that you must make every payment. Missing even one could cause the court to dismiss your case.

Be certain that bankruptcy truly is your best option. It may be that all you really need to do is consolidate some of your debts. Going through a bankruptcy is a long and stressful process. In addition to the stress associated with bankruptcy, you will also have to deal with severely restricted credit in the future. Because of this, you need to think of bankruptcy as a nuclear option; that is, a last resort.

Bankruptcy is a step that many people have to take, and as you can see, it’s not a permanent black mark. If you are willing to work hard to save money and do not spend frivolously, you can regain your credibility with creditors. Build up your savings and see what kind of deal you can get when you apply for a car loan or a mortgage.