High debt-to-income ratios necessitate individuals filing for bankruptcy. Nevertheless, it has severe consequences. Your credit will be damaged for up to ten years, the filing process will cost you at least one to two thousand dollars, and creditors will be wary of you. As a bankruptcy paralegal, I would not advise anyone with less than $10,000 in debt to file for bankruptcy. Debts can be reduced, negotiated, etc., without harming your credit score! However, if you are in the midst of a foreclosure or cannot see a way out in the foreseeable future, bankruptcy may be your best option. Consider these ten strategies if you are contemplating this option.
Pass the """"Means Test"""": If you are unmarried and earn less than $40,000 annually, you will likely qualify for chapter 7 bankruptcy. If you are married and your combined annual income is less than $80,000, you are likely eligible. Some couples file for divorce during the bankruptcy process to reduce their household income; however, the bankruptcy trustee will investigate your living situation to ensure that it is a legitimate divorce.
Replevin Orders are frequently necessary to recover property from a debtor and require the creditor to file a lawsuit against you. If the debtor is bold enough to call the creditor's bluff, he or she may be able to retain small items such as toasters, televisions, and other items valued at less than $1,000. Order fulfillment costs money and effort. In my years as a Bankruptcy paralegal, it has been extremely uncommon for a creditor to petition for a Replevin order on a possession worth less than $1,000.
After filing for bankruptcy, you can improve your credit score by obtaining a secured credit card and paying it off quickly after making minor purchases.
Do not incur debts on non-essential items (such as entertainment) and then promptly file for bankruptcy. In many bankruptcy cases, the majority of debts that are less than 90 days old are scrutinized and deemed """"fraudulent"""".
Chapter 13 bankruptcy will prevent the foreclosure of your home, but it will only buy you a few months. In the event that you fail to make payments on your Chapter 13 plan, the foreclosure process begins again.
Chapter 7 bankruptcies do not discharge mortgages and car loans. Unless you engage into a """"reaffirmation agreement"","" you will be required to return the properties once your case has concluded.
Negotiate your reaffirmation agreement with your attorney or, even better, avoid signing one! Determine whether the creditor will accept payments at the same rate as before. Typically, creditors will attempt to entice you into a new agreement with increased rates in order to benefit themselves.
Child support is a debt that cannot be discharged. Chapter 13 bankruptcy, on the other hand, can help you reorganize your child support debt and prevent the suspension of your driver's license.
Student Loans and tax debt are generally regarded as non-dischargeable obligations. In uncommon instances, they may be discharged.
Appear in court! If you do not receive a letter from your attorney, contact him/her! If you miss your court date, your case could be severely delayed or even wiped out. Before filing for bankruptcy, it is imperative that you save up some personal time off from your employer. The adjudicator is uninterested in your justifications. The lawyers, paralegals, and courts must exert significant effort to obtain a new court date if you fail to appear. Your attorney and the paralegals who assist him or her will be extremely grateful to you for making their jobs simpler.
These are just a few fundamental bankruptcy filing suggestions for Chapter 7 and Chapter 13 cases. If you have any additional concerns. Please email me at Naliniglobalconsulting@yahoo.com.""
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