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Personal Bankruptcy: Developing A Plan That Works For You

Many people find that they must file for bankruptcy protection because they have more debt than they can afford to repay. If you are in this position, you need to be familiar with the laws in your area. Different states use different laws when it comes to bankruptcy. Some states may protect you home, and some may not. Do not file before learning about the bankruptcy laws in your state.

Don't use credit cards to pay your taxes if you're going to file bankruptcy. Most of the time, you won't be able to discharge this debt, and you could make things worse with the IRS. One thing that you should remember is that if your tax is dischargable, your debt will also be dischargeable. Just because your credit card could be discharged in bankruptcy does not mean you should use it.

After filing for bankruptcy, you could have trouble acquiring unsecured credit. If you find yourself in this situation, you may want to think about getting a secured card or two. Having a credit card of any type will allow creditors to realize that you're attempting to work in the right direction to repair your credit. Eventually, you could be able to obtain unsecured credit.

Research what assets are exempt from seizure before you decide to declare bankruptcy. Bankruptcy exemptions are properties may not be seized during bankruptcy. It is important to be aware of this list so you will know what assets are saved. If you do not read this list, you could be in for some nasty surprises in the future, if some of your most prized possessions are seized.

A free consultation is standard for bankruptcy attorneys, so shop around before settling on one. Meet with the actual lawyer, not a paralegal or assistant, as they're not allowed to give out legal advice. Shopping around for a lawyer can help you find someone with whom you feel comfortable.

Understand the differences between Chapter 7 and Chapter 13 bankruptcy. There is a wealth of information online about each type of bankruptcy and their respective pluses and minuses. If there is anything that you don't understand, go over it with your lawyer so that you can make the best decision.

Research Chapter 13 bankruptcy, and see if it might be right for you. If your total debt is under $250,000 and you have consistent income, Chapter 13 will be available to you. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. This plan usually lasts from 3 to 5 years, after which, you will be discharged from all unsecured debt. Stay mindful that should you for any reason miss even one plan payment, your whole case is going to get thrown out by the court system.

If you are worried about your car being repossessed, consult your attorney about trying to get the monthly payment lowered. Often, you can negotiate a lower payment through bankruptcy. There are certain requirements and restrictions such as a loan that has a high interest rate, cars purchased 910 days before you file, and a steady job history that can help you keep your vehicle.

If you devise a plan, then you can make the situation much better. Peer to peer lending bad credit