Filing bankruptcy is a useful tool to manage your finances when there is more debt than there is income. But before you file it is important to understand how bankruptcy works, and how you can benefit from filing a case. There are a lot of requirements that must first be met in order to file a case, and you will have to gather all of your monthly bills so nothing is left off of your case when it is sent to the Court. You should also be prepared to attend at least one meeting where your lenders might be present with questions. Most importantly you should understand what debts might still be due, even if you do file bankruptcy.
In bankruptcy not all of your debt is automatically eliminated. If there are things you want to keep, then you will still have to make the payment. For example:
- If you plan to stay in your house then you should be prepared to sign a reaffirmation agreement, which is like a brand new contract for the debt. In this instance, your mortgage debt is one type of debt that is not wiped out by filing for bankruptcy.
- If you would like to keep your car you will still have to make payments. Whether you decide to reaffirm this debt is not as straightforward as the choice to reaffirm your house loan. The law technically requires a reaffirmation agreement to be signed if that is your stated intent when your case is filed, but in some cases you may be able to avoid re-obligating yourself for the loan and keep the collateral by making voluntary payments. This can be tricky and should only be done after careful consideration and upon learning all the possibilities from a knowledgeable bankruptcy attorney.
- Most credit card debt is eliminated when bankruptcy gets filed, unless you file a Chapter 13.
In order to make the most of your case and to receive the most financial benefit, call us today. We will explain how bankruptcy works and what you can expect in your case. Let us help you get back on track financially by reviewing your circumstances and offering our guidance.
For more information about how to handle overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.