Personal Bankruptcy: Little Things to Consider

The decision to file for bankruptcy is not an easy one of r anyone to make. There are many things that people have to consider before they file.

Those that choose to file for bankruptcy choose to do it because they are overwhelmed with debt don’t have the means to pay it off. Not everyone that has to file for bankruptcy is irresponsible. Millions of people have had to file for bankruptcy because of situations beyond their control. Some have gotten sick and were unable to pay their bills because they were without an income for an extended period of time. There are others that have experienced job loss or wage reduction that wouldn’t accommodate their current way of life and bills. Before choosing to file for bankruptcy protection, there are some hard facts that should be considered.

The Cold and Unwavering Reality

Filing for bankruptcy can either help someone get on the right track in paying their bill or it will eliminate their debts completely. It is a relief for those that have done it and has given them the opportunity to start over financially. Before filing, people should know some of the long lasting effects of bankruptcy. An informed decision is always the best decision.

5 Years or More- Once a bankruptcy has been filed, it can stay on a person’s credit report for 5 years or longer. For millions of people, this is something that not acceptable. Having a bankruptcy listed on a credit report can stop people from purchasing a new home, car, applying for a loan in many circumstances and much more. Not all potential creditors understand nor do they want to work with someone with bankruptcy in their files.

Business can be Jeopardized- Those that own a small business can put their business at risk. There is a very thin line between what is owned by someone and what their business owns. This is something that is especially true for those that own and operate a home based business. The assets of the business can be seen as assets of the individual filing for bankruptcy protection.

Not all Debts are Protected- There are millions of people that want to file bankruptcy because they have too much student loan debt or they have tax liens against their property. These are 2 types of debts that are not allowed in bankruptcy proceedings. While medical bills and credit card bills are among the most popular bills listed in bankruptcy proceedings, not all debts will be accepted. Those debts that are not accepted will have to be repaid and arrangements will have to be made with those parties.

Hiding Assets Can Mean Jail Time- Not everyone that files bankruptcy is as innocent as they say they are. Many have attempted to keep some of their assets from being considered in the bankruptcy by signing it over to someone else until their bankruptcy is filed and accepted. This is not recommended and it can result in fraud charges. Those that are found guilty can be given jail time and/or a fine for their choices.

Those that need to file for bankruptcy should speak with an attorney that is an expert in bankruptcy laws. If it’s determined that bankruptcy is the best option, people shouldn’t hesitate to file. Time is of the essence and filing sooner instead of later will bring more relief than stress.

While filing for bankruptcy isn’t always the ideal choice, it’s a choice that has given millions of people another chance at financial freedom.

May. 8 14'
Please do not consolidate. It is not free, they will lower your pamynets by increasing the length of time until you are debt free, and you will take a hit on your credit score. There is a better way.A. Have a garage sale and sell anything that you no longer need or want.B.Get a temporary part time job, if you have one, get another. The holidays are coming and there will be plenty of temporary jobs available. It is better to have a no fun year or two than a no fun decade.C.Do NOT get a home equity loan. Taking on more debt will not get you Out of debt.Here is a plan that can help you. If you work the plan, the plan will work for you:1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an emergency fund category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.2.First get current on all of you debts and make no more late pamynets. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three pamynets towards card #3 and that one will be paid off pretty quickly. As an example:To start :Debt #1 (highest interest): minimum payment+ extra paymentDebt #2 (middle interest): minimum paymentDebt #3(lowest interest): minimum paymentDebt #1: paid offDebt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra paymentDebt #3: minimum paymentDebt #1: paid offDebt #2: paid offDebt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late pamynets. This works no matter how many different debts you may have.4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.5a. When you have your emergency fund in place, add a category for fun to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.You can do it and it isn't as hard as you think. Just follow the plan.
Jul. 7 15'


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