7 Scary Facts You May Not Know About Filing Bankruptcy

Your debt has spiraled out of control and you are now considering filing for bankruptcy.

Filing for bankruptcy has become an impending nightmare for many families and individuals who feel they are at the end of their rope.

Although many consider it the last resort to solve their debt problems, it is not the end of the world. You can recover and even restore your good credit standing, but it takes work and discipline.

If your debt is simply more than you can handle, you should turn to your last option. It can be a scary thing, especially if you don’t know these 7 facts.

Filing bankruptcy will cost you more than you think.

Filing for bankruptcy itself is not that difficult, but you must be prepared before doing so.

Get all your finances in order on everything you owe and count every penny you spend before seeking the services of a bankruptcy attorney. This will save you a lot of time and help shorten the filing process.

So what are the 7 scary facts about filing for bankruptcy?

Some people may think that once you file bankruptcy, all your debts just go away. This is not true.

#1. If you are paying a home mortgage and want to keep your home, you will still have to make payments on the “plan” set by the court.

#two. You can surrender your home allowing the mortgage holder to repossess it, thereby eliminating the payment. However, he will no longer have his home and will have to find another place to live.

What about my cars?

#3. If you have a car and want to keep it, a portion of the balance owed to the lender is added to your plan payment. Again, it’s not free for you to maintain.

#4. You probably won’t be able to keep luxuries like boats and other RVs if the court finds they’re an asset you could convert to cash to pay off your other debts.

Do I have to pay my debt to the IRS?

#5. If you owe the IRS, rest assured they will get their cut. Only if your debt to the IRS has passed the statute of limitations does it evaporate.

What about my credit card debt?

#6. This can generally be considered unsecured debt and will be considered uncollectible. As a general rule, this debt is not calculated as part of your plan payment.

#7. As you can see, filing for bankruptcy will cost you. All attorney fees, court fees, filing fees, calculated debt loss to creditors, it’s all added to 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 ensure that all payments are made and made on time.

The thing to consider when filing for bankruptcy is to weigh the costs involved and compare them to what you owe and how long it would take to eliminate the debt by other means.

If you still feel that filing for bankruptcy is your only option, seek the advice of a good bankruptcy attorney.