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Louisville Bankruptcy Blog

Don't make these mistakes before filing for bankruptcy

Before you file for bankruptcy, there are a few things you should know. Because each case is different, there might be other points for you to think about than these. The dos and don'ts of bankruptcy start before you even file your case.

If you have been making payments to creditors, find out if you should continue making those payments. Don't make any large or unusual payments if you are planning to file bankruptcy. Payments that aren't in the norm of what you've been doing might be considered preferential transfers, which can cause problems for the creditor later.

You have rights and responsibilities in a Chapter 7 bankruptcy

When you don't have a lot of assets and only a limited income but are drowning in debt, you might decide that you are going to file for bankruptcy. More than likely, you will qualify to file a Chapter 7. This requires that you pass the means test. Once you meet it and take care of the education requirements for filing, you will be able to get your case moving forward.

In a Chapter 7 bankruptcy, any nonexempt assets you have are liquidated by the bankruptcy trustee. You won't have to make a repayment plan, but the remaining balances on accounts will be written off when your case is discharged. You should ensure that you are being fully transparent when you fill out your paperwork.

How can you keep your car if you are behind on payments?

Most people understand it is important to live within your means. Yet, for many Americans, that includes financing a vehicle with affordable monthly payments. However, considering unforeseen expenses and changes in income, things happen.

If you are in debt, struggling to make your car payments, you are not alone. Despite low unemployment rates, 7 million Americans are at least 90 days behind on their car loan payments. Knowing others are in similar situations can provide some comfort. However, if you are struggling, you may have concerns about how long you can keep your car from being repossessed.

Benefits to bankruptcy's 'automatic stay'

Reclaiming your financial security is one of the most common reasons why people opt to file for bankruptcy. There are other benefits that occur when you file. One of these is the automatic stay. Many people who file bankruptcy find this order to be one of the most pleasant things that happens when their case is started.

The automatic stay means that creditors can't try to collect money from you. They can't call you to ask about payments or send you mail to try to collect. This means that you can answer your phone or head to the mailbox without having to fear what's there.

5 ways to use your tax refund to pay down debts

Many people look forward to receiving an income tax refund because of the financial boost. If you are planning on filing for bankruptcy, you can use this extra money to augment your financial situation before the filing. Make sure you don't file for bankruptcy until you have your tax refund in your hand since the trustee will get the refund you file before you have it.

Before you pay any bill or spend your tax return on anything, make sure you understand how it might impact your filing. Consider these ideas for things you might do with the money:

Medical emergencies and employment changes may lead to bankruptcy

Your finances control just about every aspect of your life. You have to think about what you can afford before you make a purchase. Not only do you have to look at the total cost of the items you want to purchase, but you also need to think about whether you'll be able to make the monthly payments or not.

One thing that many people don't think about when they are deciding whether to take on new debt or not is what they will do if they are terminated from their job or face a medical crisis. In either of these cases, your income can be negatively impacted, which will make it impossible to make those minimum payments.

Financial mishaps that can lead to bankruptcy

If you have found yourself struggling to make ends meet, you are not alone. Some of your Louisville neighbors have probably experienced the same kinds of financial hardships. If you are caught in an endless cycle of debt that you can never seem to get ahead of, it might be time to start exploring your options. While debt counseling might be enough to help some people, others need to take more serious measures.

Bankruptcy might be a good option if you are suffering from financial struggles. While many people view bankruptcy as declaring financial failure, it is actually an effective tool to get your finances under control. If you think that your financial troubles are beyond control, you might be wondering how you got to such a point. Here are some common financial mishaps that lead to bankruptcy.

Chapter 7 bankruptcy may help you regain financial control

Some people who need to seek bankruptcy protection will file for Chapter 7. This is known as liquidation bankruptcy because your nonexempt assets will be handed over to the bankruptcy trustee and liquidated with the proceeds going to pay your creditors. If there are balances left on any of your accounts after this, those will be forgiven when the case is discharged.

When you want to file this type of bankruptcy, you have to pass a means test. You can't have assets or income that is above a certain level. If you can't pass the means test, you will have to explore the possibility of filing Chapter 13 bankruptcy.

Repayment plans vary in Chapter 13 bankruptcies

People who file for Chapter 13 bankruptcy must take the time to think about how this is going to impact their finances. There are three primary concerns that you might have when you make this decision. First, you know that your debts will be rolled into one payment. Second, you will have to make payments to the bankruptcy trustee. Third, you will need to live without credit for a while since you can't take on new credit without the bankruptcy court's permission.

When you put all of these factors together, you can see that things will be tight financially for the duration of your bankruptcy. The court will set out the terms of these payments for you. These are made for three to five years, depending on what is necessary for your case. The trustee will send them out to the creditors based on a formula set by the court.

Use bankruptcy to keep creditors in their place

When you file for bankruptcy, you have to think carefully about how it will impact your finances. For many people, filing for bankruptcy helps immensely because it does away with a lot of the debts that are crushing them. Sometimes, the best thing that you can do is wipe the slate clean and turn over a new financial leaf.

As income tax season approaches, some people who have debts might be interested in paying them off using a refund they expect to receive. One thing to remember is that your creditors can't force you to pay anything from your taxes to them. These are private debts that don't lead to the creditor garnishing your tax return. However, they can get a court order that puts a levy on the bank account where you have the direct deposit routed.

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