Bankruptcy Advice You Should Find Helpful

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Bankruptcy Advice You Should Find Helpful

Saturday, January 3rd, 2009    Subscribe To Our Feed

Bankruptcy advice varies, depending on who you ask. A credit card debt reduction company might say that it’s better to just stick it out, settle your debts and establish a monthly payment schedule, even if it takes you five years to finish it! Needless to say, many of the debtors set up on such plans drop out and file for bankruptcy anyway. If you were to ask a lawyer, then they might say that bankruptcy is the only option for you, while asking for more than $250 just to file. Many people find they can’t come up with the lump sum to go through with it and feel they are beyond all hope.

The key to holding onto your assets is to seek bankruptcy advice right away. Many people facing foreclosures wait until the day before a foreclosure sale to inquire, which limits their options drastically. Even if you’re only toying with the idea of bankruptcy, seeking advice can often point you in the direction of helpful credit report repair and debt management services. Homeowners don’t necessarily lose their property in a bankruptcy case because they are allowed the first $10,000 in equity above all liens and judgments. For instance, say a house is worth $250,000 and the mortgage is $240,000, and assuming that the homeowner is current on mortgage payments, has little home equity and has lots of credit card debt, then he or she will still be able to keep the house after filing Chapter 7. Under Chapter 13, if an individual is behind on mortgage payments, has substantial equity and a lot of credit card debt, then he or she can still keep the property so long as the debt can be repaid. However, if the person has a $200,000 mortgage left on that same property, a trustee may sell the property, giving the individual the first $10,000, unless the debtor can come up with the remaining $40,000 in nonexempt equity. Lastly, you may still be able to buy a house, despite filing for bankruptcy, although your interest rate will likely be high and you will be required to come up with a heftier down payment.

When you’re seeking advice from a credit repair attorney, be sure to double-check what can and can’t be discharged. For instance, you’ll still have to pay off the Government if you owe taxes for the past 36 months. However, if you have personal income taxes over 36 months old, then you can discharge them through bankruptcy. Fiduciary taxes cannot be discharged, nor can most student loans and liens. If you owe child support or alimony, you will still have to pay up. If you don’t list debts on your bankruptcy petition, then they will not be covered. If you have debts from drunk driving or other “willful and malicious” harm, you’ll still have to pay your dues. However, there are many things that can be removed when you file for bankruptcy, such as all unsecured credit card debt, wage garnishments, utility termination, fraudulent credit claims and foreclosure.

After you receive bankruptcy advice, there are a few things to consider before you file. First, be sure you can’t negotiate with your creditors, reduce your balances with a settlement letter or arrange a monthly payment plan. Generally speaking, if you can only afford minimum monthly payments on your bills and cannot pay off all your balances in five years, then you should file for bankruptcy and then focus on credit restoration services.

If given the opportunity most people would choose to live free and clear of all bills. That includes a home mortgage, a new car and credit cards. There would be enough money each month so that they could put back towards retirement or education. In a perfect world everyone would have exactly what they wanted and needed. But this is not a perfect world. Most people rely on credit cards, loans and mortgages in order to live. These allow them to live the way they want but it also puts them in bad credit.

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