Having too much money in the bank. This is a time when it is not good to save. When you file for bankruptcy, anything over $200 in most cases will be seized and used to pay your creditors. If you have a significant amount of money in savings, you may want to consider entering into a payment plan or settlement with your creditors before you file for bankruptcy. This may allow you to save some of your money.
A Chapter 7, also known as a straight bankruptcy, is a person’s most powerful weapon. It makes most debts disappear without paying them back at all. Straight bankruptcy is a good idea if someone realistically cannot expect to pay a significant portion of his or her debts within a reasonable period of time.
A Chapter 13 bankruptcy involves restructuring or reorganizing some of your debt over a period of time, from three to five years. Each week or month, a payment is made to a Chapter 13 trustee, who then pays the creditors. Chapter 13 can be an extremely flexible and useful way to deal with debt problems and to get rid of high interest rates.
Some refer to this as a “US Government Managed Repayment Plan.” Actually, it is the individual who makes up the plan, and, if the plan is accepted by the court, the only “government management” you will ever see is the fact that the money is paid into the the court-appointed trustee, and the trustee pays it out. You control the terms and the percentage of payment to the individual creditors. The Chapter 13 bankruptcy can be filed even if you have filed a bankruptcy in the past and is commonly used to stop foreclosures.
In a straight bankruptcy, the employer is not notified, because there is no repayment plan to be wage deducted. In Chapter 13, the preferred method of plan payment is by wage deduction, although it is possible to have the payments taken directly out of your bank account, without involving your employer. There is an additional option to have the payment taken directly from your bank
If you are a candidate for bankruptcy, your credit rating is probably already damaged, although this is not always the case. We have seen many cases where no payments have been missed, although the people are borrowing on one credit card to pay on the other cards.
Credit reporting companies are able to keep a notation of the bankruptcy for up to ten years, but today, unlike even a few years ago, filing bankruptcy is NOT the end of your ability to get credit. We tell all of our clients several easy ways to rebuild their credit quickly. These steps are so successful that our clients call to tell us that they have rebuilt their credit, and two or three years after bankruptcy, they are buying a house.
When have you ever seen anyone’s bankruptcy in the paper? It is a public record but you have to read the legal newspapers to see it and the only people I know that read these papers are lawyers. Anyone who wants to can go to the federal court in Eugene and see who has filed bankruptcy.
We have actually filed bankruptcy for relatives, at the same time, and neither knew that the other was filing. Unless you tell them, your friends, relatives, and neighbors, or anyone else, are not likely to know that you have filed.
Yes, you can keep your car, your house, your stereo, and other property, subject to certain limitations if they are owned outright. If you owe on any of it, you can choose to keep the debt and the result is just as if you had not filed on that particular debt. This is what people mean when they say that they did not file on their house or car or other debt.
What if I Want To Pay Back My Debts, I Just Need Some Time To Catch up
and the Creditors Are Unreasonable, Demanding Payments I Cannot Make,
and Refusing To Work With Me?
In this case, a Chapter 13 will probably be your best bet. You can stretch out your payments for three to five years, and the creditors cannot do anything to stop you.
No. Most of my Chapter 13 plans pay less than 100% on some or all of your debts. This will depend on your living expenses, how much you earn, and what types of debts you owe. Then, if you successfully make all of the plan payments, your debts will disappear at the end of the plan, even if you have not paid them back in full.