Bankruptcy Advice You Might Find Useful

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Friday, October 24th, 2008 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.

First, let’s look at some of the misconceptions that come out of bankruptcy advice. Some believe that you must be flat broke to file for bankruptcy, but the only requirement is that the debtor cannot pay the bills as they are due. Another misconception is that those who file will not be eligible for credit in the future, when in reality, the listing will be on your report for 10 years, limiting your access to credit but not outright destroying your chances at redemption. In actuality, creditors will know that you cannot file for bankruptcy again for another six years, so you’re less risky than a borrower who has a low credit score from arrears accounts in collections.

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 3 years. However, if you have personal income taxes over three years 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.

Professional bankruptcy advice says that there are several ways to determine if bankruptcy is right for repairs to your financial situation. First of all, make a monthly budget, adding up all your expenses, such as rent/mortgage payments, utilities, food, gas or bus fare, clothing, car loans, etc. and all of your monthly income, including employer, benefits, food stamps, pensions, disability, etc. If your income is a lot less than your expenses, then bankruptcy may not help. If you suspect you may need credit cards to live even after filing, then you may need to get another job or cut expenses. If your debts are already a few years old, then you may want to just hang in there for several more years until they come off your report or you pay them.

It is really nice to get a brand new credit card that has a high limit. At first you promise yourself that it is just for emergencies but before long you notice that you are using that credit card for day-to-day living expenses. To make matters worse, the problem usually does not stop with just one credit card. Slowly bad credit begins to accumulate and before long you find yourself in a world of trouble. There is not enough money to pay off the bills and interest keeps piling up. Stop living this way! There are ways to rid yourself of that baggage and find a better way to live.

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