Making Sense Of Your Financial Mess

About Me

Making Sense Of Your Financial Mess

A few years ago, I realized that I had a real problem. I hadn't been able to pay my bills in awhile, and I was left wondering what to do. Bill collectors called me non-stop, and I wasn't sure how to go about making things right. Fortunately, a friend of mine who understood my mess explained that it might be a good idea to meet with a bankruptcy attorney. After I went, I was blown away with the level of care and understanding I was given. This website is all about helping other people to see the light, even when they are in the midst of battling a hectic financial situation.

Considering Filing Bankruptcy?

From a large accumulation of debt that you are unable to pay for to an actual loss of income due to a medical issue, injury, or unemployment, losing control of your finances can be stressful. Fortunately, options are available if you qualify. Bankruptcy is a common solution for many people struggling to pay debt along with their basic living expenses, such as rent or mortgage, insurance, and utilities. Even though many people are opting to file bankruptcy for relief, most people are not very familiar with their options or the process involved. If you are considering filing, here are a few things you should know.

You're Not Alone

Struggling to pay your bills can be physically, emotionally, and financially overwhelming. Not only will it affect you and your emotional well-being, but it can also have a negative effect on your family. You may feel a great deal of frustration and embarrassment, but it is important to know you are not alone.

In 2017, an estimated 794,492 individuals and businesses chose to file for bankruptcy. Therefore, do not feel guilty and alone because of your financial hardships.

You'll Have Options

Your situation may be completely different from another person considering bankruptcy so that you may require a different filing option. Thankfully, you and your attorney can discuss which type of bankruptcy will suit your needs and finances.

Chapter 7 is the most popular type of bankruptcy. Also known as liquidation, creditors will discharge your debts completely. However, you will most likely need to sell some of your assets to help pay off the debts, allowing you to start over with a clean slate.

There are certain qualifications you will need to meet before filing chapter 7. Basically, you will need to pass a "means test," which proves you do not have the income or assets to pay your debts off while still paying basic living expenses.

If you are unable to pass the "means test," but you still have excessive debt with insufficient income to pay for these debts, your attorney will suggest filing a chapter 13 bankruptcy.

During chapter 13, you will be required to pay back your debt over a period of a few years. This repayment plan allows you to pay a smaller portion of the debt without accruing additional interest and late fees. In addition, the more affordable payment will be made to a bankruptcy trustee each month.

Rebuilding Credit Is Possible

Bankruptcy does not have to affect your credit forever. Chapter 7 can remain on your credit report for up to 10 years while chapter 13 can affect your credit for seven years. Fortunately, you can start rebuilding your credit immediately after filing.

To get started, apply for a secured credit card from your bank. Place a small down payment on the account. This serves as your credit limit. Each month, make a small purchase using the card, paying it off immediately.

Make sure to continue making your bankruptcy repayments, as well. For more information, contact your bankruptcy lawyer.