What You Should Do When You Have to File Bankruptcy
August 19, 2010 by Credit Attack
Filed under credit card services
Bankruptcy isn’t something to be taken lightly or looked at as an easy way out of a financial situation. If you are having serious problems and you know that there is absolutely no way to pay your bills, you should only then consider filing for bankruptcy. You can only file for bankruptcy every six years so you need to make sure that filing is the only way out of your financial situation.
If you aren’t really sure whether or not it is the time for you to file bankruptcy even though you don’t know another way out of your financial obligations, you should speak to a lawyer. Talk to the lawyer about your financial problems and get his opinion on whether or not you need to file bankruptcy. Talking to someone who knows the rules will help to make the path clearer for you.
If you do decide to file bankruptcy, you will have two chapters to choose from. Depending on your financial problems, you will need to decide which chapter you will need to file under:
• Chapter 7 allows you to keep only secured property that you are up to date on the payments on. You will have to keep those payments up also until they are paid in full. Chapter 7 is also known as ‘liquidation’ bankruptcy which means that all your debts are wiped clean and you will have to give all nonexempt property to the trustee so that your creditors may be paid.
• Chapter 13 has been called the ‘wage earner plan’ because you will be allowed to keep your car and home, things that you’ re making payments on, but you will also have pay back money that is in arrears. This money that has been paid for you to adjust the payments and take them from being late to not. You generally have three to five years to pay off arrears.
You should also know that when you file bankruptcy that your tax refunds and earned income credits may be greatly affected. Depending on when you decide to file bankruptcy will determine if your tax refund will be affected. You definitely need to talk to a lawyer before you decide to file bankruptcy.
If your debts are piling up you and you are seriously considering filing bankruptcy, you should try to sell some of your property to pay on some of those bills first. You can probably do without a lot of the property you have. If so, get to selling some of it and try to save yourself from filing bankruptcy.
