A lot of people are in debt right now. Countless Americans are currently being harassed by debt collectors on a daily basis. If this sounds like your situation then perhaps filing for bankruptcy may be in the cards for you. Keep reading to see if this is a viable solution for you.
If you are considering using credit cards to pay your taxes and then file for bankruptcy, you may want to rethink that. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. Transferring the debt to another medium (e.g. a credit card) won"t magically make a tax debt discharagable, either. Therefore, you have no reason for use of a credit card, if the amount is to be discharged in due process of the bankruptcy.
Before you file for bankruptcy, carefully consider if it is the right option for you. There are other options available, such as credit counseling for consumers. Bankruptcy permanently affects your credit, so avoid filing until you have exhausted all of your other options.
Honesty is of utmost importance during your filing, even though it may be tempting to “pad" your answers a little. You might feel tempted to not declare certain assets in your bankruptcy in order to protect them from forfeiture, but if you"re found out, the process could take longer, or worse, you might be banned from filing for bankruptcy completely.
Be warned that after your bankruptcy, you may stand out as a leper to credit institutions. You may be unable to get a simple credit card. If that"s the case, it is beneficial to apply for one or even two secured cards. 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.
Familiarize yourself with any new law before you make the final step to filing for bankruptcy. Bankruptcy laws are in constant flux, so just because you knew the law last year doesn"t mean that the laws will be the same this year. To stay up-to-date on these laws, check out your state"s government website.
You should now understand that there is more than one path to take when it comes to bankruptcy. Don"t let the situation overwhelm you. Look at bankruptcy as a way to begin again.