Bankruptcy Rule 4: Figure Your Costs

Category: Finance.

Upon first recognition that you need to take drastic measures against your mounting pile of bad credit, it can be overwhelming.

And how exactly is chapter 11 bankruptcy any different? So many different avenues to take, do you want to file chapter 13 bankruptcy or do you qualify for chapter 7? You ve made the tough decision to file bankruptcy, now you just don t know where to start. Bankruptcy Rule 1: Stop using your credit cards. Here are some tips on what to do first when facing a financial crisis. Using credit cards with intent to file for bankruptcy will give creditors the opportunity to challenge your discharge of the debt. Lesson one, no more charging.

If you ve accumulated the debt knowing you could not repay it creditors have the option to nullify your debt discharge- usually done through a lawsuit or adversary proceeding. Period. Between debt management, and all the, credit counseling untrustworthy organizations promising a quick fix, there is no doubt that it will require some homework. Bankruptcy Rule 2: See to it that there are no other options for you to utilize. But do your research and make sure that there isn t a more gentle method of cleaning up your credit before you resort to the big" B" . Many people try to go through this process on their own and end up losing big in the end.

Bankruptcy Rule 3: Once you ve narrowed down your options and filing bankruptcy is the only one that seems like it will work for you and your situation, find a good lawyer. Proper legal council will guide you through the process, offer advice on which chapter of bankruptcy is best for you, and will be a huge asset if it comes down to negotiating for better terms with your creditors. Bankruptcy filing fees vary widely from state to state and naturally different lawyers will have different fee schedules, some charging a flat fee, others charging based on how deeply you are in debt. Bankruptcy Rule 4: Figure your costs. Still other require you to pay up front before they even start the process, but once you have started working with a lawyer, refer all creditors to this office. Exempt items such as tools of your trade and low value heirlooms are considered exempt items.

Bankruptcy Rule 5: Depending on whether you re filing for chapter 7 or chapter 13 bankruptcy, prepare to give up some of your belongings. All others fall in the non- exempt category and are likely to be sold so that payments can be made to your creditors. In chapter 7 bankruptcy you may never have to pay a creditor and had all of your debt written off. Payment amounts differ between chapters. However if filing for chapter 13 bankruptcy you will be put on a three to five year payment plan at the end of which any outstanding debt will be written off. If you file chapter 7 bankruptcy, on the 60th day after meeting with your creditors to negotiate the terms of your bankruptcy declaration, your creditors forfeit the right to challenge any and all of your discharge and you will receive a notice of discharge. Again a good lawyer will be able to tell you which one would help more for your specific situation.

This notice will come within 30- 60 days after your final payment under a chapter 13 bankruptcy filing Best of luck in all your endeavors and may your financial recuperation be speedy.

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