Filing for personal bankruptcy protection is an important strategy for people that have had assets, such as their vehicle, seized by the IRS. Although filing bankruptcy can have a major effect on a person’s credit record, it may be the only viable option. Check out the following tips to see what filing for bankruptcy entails and what can happen if you do.
Do not use your retirement fund or savings to pay off creditors. Leave your retirement accounts untouched unless there is absolutely no other alternative. Of course you will have to touch some of your savings to get through all of the hearings, but do not put out any money that you do not have to by law.
You may still have trouble receiving any unsecured credit after a bankruptcy. If that is the case, you should try applying for one, or two secured cards. Using a secured card not only helps to rebuild your credit, but it also keeps you from going more in debt with credit card bills. Unsecured credit may be offered to you quicker than you think after doing so.
Be brutally honest when you file for bankruptcy, as hiding assets or liabilities, will only come back to haunt you. Wherever you file, that court has to be made aware of all details regarding your finances, positive and negative. Do not hold anything in secret and create a strategy on how you will deal with the things you are facing.
Before you decide to file bankruptcy, be sure to check for any new laws that may apply to your case. Bankruptcy laws constantly change and it’s crucial you know about them so you the process of filing for bankruptcy goes smoothly. If you are not sure about the current laws all you have to do is look into what laws have been passed.
We would like to reiterate that you always have the option of filing for personal bankruptcy. However, it has detrimental effects on your credit, so this should not be your first choice Knowledge is power when it comes to bankruptcy.