Bankruptcy can make or break an individual. Depending on how it is handled, one can recover and save their own life financially, or they can never recover and be stuck in immense debt for the rest of their lives, while losing everything they hold dear. Find out how to handle bankruptcy the right way with the following tips.

Do not pay your taxes with credit cards that will be canceled when you file for bankruptcy. In most states, this debt won’t be discharged, and you could end up owing the IRS a whole lot more. In most cases, you can use the adage that “a dischargeable tax is a dischargeable debt.” So, there’s no reason to make use of a credit cards if it will not be discharged in bankruptcy.

Consider hiring an attorney who specializes in personal bankruptcy. Although most states allow you to file for bankruptcy without a lawyer, your case could be dismissed if you don’t fill out your paperwork correctly, and you may need to file additional motions to protect your property or discharge certain debts. A bankruptcy attorney can help ensure that you get the outcome you hope for when you file.

Before resorting to bankruptcy, contact your creditors in a good-faith effort to renegotiate your payment terms, or interest rate. If you get in touch with them early enough, they may be willing to waive fees or negotiate a new payment schedule. If they are it means they are more likely to receive the money that you owe.

Be prepared to see your name in the news when you file bankruptcy. While the story isn’t going to make front-page headlines unless you are a very prominent or famous figure, all bankruptcy cases are public record. As such, they are often reported in a section of local newspapers. The good part is that not everyone reads that part.

Find out what the homestead exemption limit is in your state before filing for Chapter 7 bankruptcy. If you have too much equity in your home to qualify for the exemption, you could lose your house in the bankruptcy. You can’t change your mind once you’ve begun the process, so make sure you will be able to keep your home before you file.

Personal bankruptcy should be a last resort if you’re in insolvency. This is due to the fact that it will take years for the bankruptcy to work off your credit report and new law changes make it harder to escape paying the debts off. In other words, you could have bankruptcy on your credit report and still be paying off several of your debts.

Start planning for your life after bankruptcy now. The entire process can be very overwhelming, and leave you feeling like you have few to little options. You begin rebuilding your financial future right away. Get solid advice from trusted sources, be prepared to work hard at it, and most importantly, don’t be afraid to dream again!

Anyone can survive bankruptcy, or they can let it doom their lives. There is a correct way and a wrong way to approach bankruptcy, and hopefully, you realize the right way thanks to the tips in this article. Use them wisely and eliminate personal bankruptcy for good and with ease.