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Appleton WI Bankruptcy Law Blog

Paying down debts will work for some, but not others

When you have a high debt load, you have to think carefully about how you are going to pay that down. There are many options that you have, but you must consider how various options will impact you now and into the future. Finding the best order to pay off bills is challenging, but it will be worth it as you see your debts trending down.

Your top financial priority has to be paying for the necessities. For example, you must pay for your mortgage and vehicle payments unless you want those to be taken back by the lender. You also need to pay for utilities and insurance payments since those are also important for your life. When it comes to other bills, you have to look at several factors.

Regain control over your finances with a Chapter 13 bankruptcy

For many people, having to file bankruptcy might feel almost like a failure. What these individuals don't think about is that this process is actually an important financial tool that can help them to regain control over their finances when things are spiraling out of control. We know that you might not have all the information you need to move forward. We will work with you to find out what you need to know.

If you have an income and some assets that you want to protect, such as your home, filing a Chapter 13 bankruptcy might be in order. You need to ensure that you understand what this chapter does. For one thing, you will have to live on a tight budget for a while since this bankruptcy requires you to make consistent payments to the bankruptcy trustee. These payments are planned out ahead of time, so you will have to follow the schedule.

Types of assets in a bankruptcy case

One of the primary factors that affects people's decision to file for bankruptcy is what assets they can keep and what assets they're going to have to hand over to the bankruptcy court to satisfy their debts. If you're in this position, it is imperative that you understand which assets are going to fall under which category.

There are two types of property in the bankruptcy system. One of these is exempt property. The other is nonexempt property. Exempt property is the property that the bankruptcy court will allow you to have. You don't have to turn this property over to the bankruptcy court, so you can continue to use it.

Establishing credit after bankruptcy

Bouncing back from bankruptcy isn't going to happen right away. You will have to work hard to get things set up so you can enjoy having a solid credit history. This doesn't mean that is going to be impossible, but you should be prepared for it to take time.

One of the most important things for you to remember as you rebuild your credit is that you need to use your resources carefully. Try not to rely on credit accounts. Instead, use them here and there for smaller purchases. This will help you to build up a positive payment history that can make your life easier in the future.

Determine how Chapter 7 might impact your life

The crushing weight of debt can hold you down. If you are in this position, you might decide that you need to file for Chapter 7 bankruptcy. This possibility should be carefully considered so you can ensure that it is the right option for your needs. There are actually several things that might mean that a Chapter 7 filing isn't the right option for you.

One thing to remember about a Chapter 7 bankruptcy is that you have to pass the means test. This determines whether your income and assets are too high to file for the liquidation bankruptcy. If they are, you need to file a Chapter 13 bankruptcy, which means that you will have to repay some of the money owed by paying the trustee on a set schedule.

Find the relief from crushing debt that can set you free

Finding a way to pay off your debts can be a challenge. When you are ready to get everything taken care of, you might need to explore options that enable you to make more than just the minimum monthly payments. There are some debt relief companies that will offer to do this for you; however, many of these are unscrupulous companies that prey on people who are trying to get debts paid.

We realize that you don't want to fall victim to these scams. We are here to help you find a debt relief plan that works for your needs. In many cases, bankruptcy is the best option available. Even though this might seem like a frightening prospect, many people who learn a bit about it find that it is what they need to do.

An income tax audit isn't prevented by a bankruptcy case

One concern that many people have when they file for bankruptcy is that the filing will trigger an audit from the Internal Revenue Service (IRS) when they file their taxes. While it is possible that you will be audited, there isn't a tie to the bankruptcy.

With the number of people who file for bankruptcy each year, there isn't a practical way that the IRS could audit each of them. There are financial limitations to what the IRS can do each year, so it will likely fare better if it doesn't focus on people who have filed for bankruptcy.

Bankruptcy is a time for financial rebuilding

Having more bills than you do money is a tough position to be in. For many people, their normal bills aren't the issue. The credit cards and medical expenses are the ones that are the problem. For these individuals, filing for bankruptcy might be beneficial.

There are many different things to think about when you are considering bankruptcy. One of these is how it will reduce the stress on your life in the upcoming weeks. One of the biggest stressors for people who are in debt is having to deal with collection attempts. When you file for bankruptcy, these stop thanks to the issuance of the automatic stay. You can answer your phone and check your mail in peace when you have this in place.

Be careful with new credit cards after you file for bankruptcy

Rebuilding your credit after bankruptcy is an important step. After all, if you don't begin using credit responsibly after your discharge, you will find it hard to secure credit in the future. Whether you hope to buy a home within the next decade or just want to qualify for the best rates on your auto insurance, working up to a good credit score can go a long way.

Unfortunately, many people fall into the trap of making the same mistakes after bankruptcy that they made before filing. Whether you file for Chapter 7 or Chapter 13 bankruptcy, you need to make smart decisions about how you use credit after your bankruptcy. That statement is especially true when it comes to credit cards after bankruptcy.

Bankruptcy can provide relief from medical bills

While there isn't an official chapter of bankruptcy that addresses only medical bills, people who are overwhelmed by these expenses might consider filing a personal bankruptcy. A Chapter 13 or Chapter 7 filing can provide you with the financial relief that you need.

One important thing to remember is that you can't file bankruptcy only for your medical bills. Instead, you will include all of your debts in the filing. This is troubling for some people because they want to keep up with all their bills.