Bankruptcy should i do it

Chapter 13 bankruptcies can take much longer. First, the bankruptcy plan must be approved by the bankruptcy court, which can take some time. Plus, while you're able to keep certain secured property like a home or car while you make payments under a Chapter 13 bankruptcy plan, the process can drag on for three to five years.

Since bankruptcy forms and schedules are complicated, you should seriously consider hiring an experienced bankruptcy attorney to complete them. You don't want your case to be dismissed because the forms are filled out incorrectly. Plus, the success rate for bankruptcy cases filed without an attorney is low. If you choose not to hire an attorney, but misunderstand the law or make a mistake, it can affect your legal rights.

You might, for example, end up losing property that you mistakenly thought you could keep. You can't count on bankruptcy court employees and judges, either—they aren't allowed to offer any legal advice. To find a bankruptcy lawyer in your area, try the "Find an Attorney" tool on the National Association of Consumer Bankruptcy Attorneys' website.

Of course, the downside is that lawyers are expensive. Attorney fees can run you several hundred to several thousand dollars, depending on the complexity of your case and where you file. Plus, you typically have to pay attorney fees up front, especially in Chapter 7 cases.

Other court fees are possible, too. And the list of potential court fees can go on and on. The bankruptcy process requires complete honesty.

You have to certify under penalty of perjury that your bankruptcy forms and schedules are complete and accurate as filed. Otherwise, you risk being prosecuted for bankruptcy fraud, which is a serious crime. Don't try to hide property, either. There are severe criminal penalties for failure to disclose assets.

The bankruptcy court can also dismiss your case for failure to disclose assets or debts. If you don't want the world to know about your financial affairs, then bankruptcy might not be for you. Once you file for bankruptcy, all the forms you submitted are considered public records. So, anyone can view your paperwork. Your income, assets, and debts will be an open book for everyone to see.

You also have to attend a public meeting of creditors after you file bankruptcy. At that meeting, a bankruptcy trustee will ask you questions about your situation in a public forum. This meeting doesn't take place in bankruptcy court, either. For example, in Virginia, the meeting of creditors is held in the Alexandria office of the U. Bankruptcy sticks with you for a long time. For example, it will stay on your credit report for up to 10 years.

As a result, you'll probably have a harder time getting a loan in the future because of a bankruptcy filing. Also keep in mind that you're limited on the number of times you can file bankruptcy. Chapter 7 bankruptcy can be filed once every eight years, while Chapter 13 can be filed every six years.

So, if you do file for bankruptcy, make sure you do it right because it will be a while before you get another crack at it. The Best T. Rowe Price Funds for k Retirement Savers. Skip to header Skip to main content Skip to footer. Try Walmart or PayPal. Don't be surprised by an unexpected state tax bill on your unemployment benefits.

Know where unemployment compensation is taxable and where it isn't. November 3, When Do Monthly Payments Arrive? Other times, you may be able to deal with debt in other ways, and avoid bankruptcy altogether. Read on to learn more about several situations when it might be beneficial to delay bankruptcy. These days, many people file for bankruptcy to delay a foreclosure. While bankruptcy can be a good solution in this situation, many people file much earlier than they need to, which makes it more difficult to obtain a mortgage modification.

Once you file for bankruptcy, many lenders will refuse to enter into or continue negotiations over your mortgage.

Because your bankruptcy will cancel the promissory note part of your mortgage but not the lien on the house , technically there will be nothing left to negotiate. If you might want to seek a mortgage modification in the future, you probably should avoid bankruptcy -- at least until you know which way the modification winds are blowing. When you file for Chapter 7 bankruptcy, the court will look at your income over the past six months to determine whether you are eligible, using what's called the "means test.

If your income has dipped recently because of a pay cut or layoff, you can often become eligible for Chapter 7 by simply waiting a few months.

Once several months of decreased income are figured into the means test, your average income over the past six months may be low enough to qualify. You may have property that you would lose in a Chapter 7 bankruptcy if you file now, but that you could keep if you wait -- or at least have time to sell and use the proceeds. For example:. It's a good idea to hold off on filing for bankruptcy if you foresee other significant expenses in the near future.

As a general rule, Chapter 7 bankruptcy only erases debts you have as of your filing date. Debts that come along later will be yours to deal with, sometimes for years to come. For example, if you will be having knee replacement surgery in the next year and you will have to pay some or all of the expenses, those expenses will be wiped out if you wait to file for Chapter 7 bankruptcy until after your surgery. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.

Knowing your bankruptcy property exemptions can help you keep important property, and minimize what you pay to creditors. Learn about the various types of exemptions, which ones you can use, and how they can benefit you in either a Chapter 7 or Chapter 13 bankruptcy. Personal Finance. Debt can be both a powerful tool and a horrible demon. While having some debt can be good - it allows you to live la vida loca - having too much debt can be disastrous.

The following tips can help you maintain some sanity when the bill collectors come calling. While you will have to deal with the bills, these tips can help you avoid being harassed. Chapter 11 and Chapter 13 bankruptcy can both help you eliminate your debt and restructure your business. But they each carry their fair share of advantages and disadvantages. Find out how they work and which one may be right for your business. Not everyone with debt problems should file for bankruptcy.

Here's a look at some of the factors you might want to consider. If money is a tool, then credit is the tool belt. Letting your finances get out of control is a sure-fire way to find yourself re-filing for bankruptcy. Responsible spending begins with the way we think and what we know. Educate yourself on money and credit. Find out when student loans may be addressed in bankruptcy, what procedures are required, and what other options you may have.

Business Management. If you're wallowing in debt, sending a debt settlement letter to creditors to lower your amount of debt might work, as it does for many people who want to eliminate debt. See what you can do to put your finances and your life back on track. Once you've made the difficult but brave decision to file for bankruptcy, you'll need to find the right bankruptcy attorney.

How to Assess Your Financial Situation Here are a few questions to help you assess your financial danger zone: Do you only make minimum payments on your credit cards? Are bill collectors calling you? Does the thought of sorting out your finances make you feel scared or out of control? Do you use credit cards to pay for necessities? Are you considering debt consolidation? Are you unsure how much you actually owe? How Do I Declare Bankruptcy? Filing for Chapter 7 Bankruptcy There are lots of reasons people file for Chapter 7 bankruptcy.

Filing for Chapter 13 Bankruptcy For people who have property they want to keep, filing a Chapter 13 bankruptcy may be the better choice. Declaring Bankruptcy: Scary, but Sometimes Necessary It can be hard to admit you need help getting out of debt, or that you can't do it alone.

About the Author Janel C. Atlas Read more. Related Topics.