Your debt has grown out of control and now you are considering filing bankruptcy.
Filing bankruptcy has become a looming nightmare for many families and individuals who feel they are at the end of their rope.
Though considered by many as the last resort to resolving your debt issues, it is not the end of the world. You can recover and even regain your good credit standing but it takes work and discipline.
If your debt is simply more than you can handle you have to turn to your last option. It can be quite a scary thing to do, especially if you don’t know these 7 facts.
Filing Bankruptcy Will Cost You More Than You Think.
The filing for bankruptcy itself is not that difficult but you need to be prepared before you do so.
Get all your finances in order on everything you owe and count for every penny you spend before you seek the services of a bankruptcy lawyer. This will save you lots of time and help shorten the process of filing.
So what are the 7 scary facts of filing bankruptcy?
Some people may think that once you file for bankruptcy all your debt simply goes away. This is not true.
#1. If you are paying a home mortgage and want to keep your house, you will still have to make payments into the “plan” that is set forth by the court.
#2. You can surrender your house allowing the mortgage holder to take it back thus eliminating the payment. However, you will no longer have your home and have to find another place to live.
What about my cars?
#3. If you have an automobile and want to keep it, a portion of the balance due the lender is added into your plan payment. Again, it is not free for you to keep.
#4. You probably will not be able to keep such luxuries as boats and other recreational vehicles if the court feels they are an asset that you could turn into cash to pay down your other debts.
Do I Have to Pay My IRS Debt?
#5. If you owe the IRS, rest assured they will get their cut. Only if your IRS debt has passed the statute of limitations does if evaporate.
What About My Credit Card Debt?
#6. This one you can usually consider non-secured debt and it will be considered non-collectible. As a general rule, this debt is not calculated as part of your plan payment.
#7. As you can see, filing bankruptcy will cost you. All attorney fees, court fees, filing fees, calculated debt loss to creditors everything is added into your plan payment.
You will still have a monthly payment. Not only that, it will be deducted from your paycheck through your payroll deduction. It is still your responsibility to be sure that all payments are made and made on time.
The thing to consider when filing bankruptcy is to weigh the costs involved and weigh them against what you owe and how long it would take you to eliminate the debt by other means.
If you still feel that filing bankruptcy is your only option, seek the advice of a good bankruptcy attorney.