With the ongoing economical turmoil in the world, more and more people are considering personal bankruptcy as a viable option. It can be the only way to hold on to your home, car and other valuables. Sometimes, it is the only lifeline you have. The following article will explain personal bankruptcy and the options it may hold for you.
DonÃ¢â‚¬â„¢t use a credit card to pay off your taxes before filing for bankruptcy. In most states, this is not dischargeable debt. Therefore, you will end up owing the IRS a lot of money. The main thing to remember is that dischargeable taxes are the equivalent of dischargeable debts. It is pointless to use credit cards if they can be discharged.
Trying to exclude family members you owe money to before filing for personal bankruptcy can get you into serious hot water. The court will look into who you pay-off as far as a year back, and if they find you showing favor to family over other creditors, they could invalidate your filing completely.
DonÃ¢â‚¬â„¢t charge up your credit cards knowing you are going to file bankruptcy, if you have already started the process or made recent purchases for luxury items. While this type of purchasing is still part of your Ã¢â‚¬Å“Ã¯Â¿Â½debt,Ã¢â‚¬â„¢ it is likely that youÃ¢â‚¬â„¢ll still be responsible for repaying the money for those items. In most cases, what you are attempting to do is obvious.
If you have co-signers on car loans, or others who are responsible for your bills, consider filing for Chapter 13 bankruptcy if you want to help them. If you file for Chapter 7, you may not have to pay anymore, but they are still responsible. Talk to the people involved, and think carefully before making a choice.
As noted earlier, the current economic climate keeps more people in a constant state of struggle, and many of them are turning to bankruptcy. If you decide that this option is the best one for you, hopefully this article has provided you with helpful guidance you can use to face your financial future and make positive changes.