Get Out Of Debt

Chapter 13 bankruptcy is a form of debt relief put into place by the federal government that allows you to pay your debts back to your creditors over a period of no more than five years. How long you have to pay back your debts after you enter chapter 13 bankruptcy depends on a number of things, including factors such as your income and the amount of debt you owe. It is there for people who do not want a chapter 7 bankruptcy or those who do not qualify for a chapter 7 bankruptcy, and looks a bit better on your credit report.

Who qualifies for a chapter 13 bankruptcy? Anybody whose debts are under a certain amount can file, even those who work for themselves. The only time a person cannot file is if they have already filed a bankruptcy within the past 180 days and it was dismissed for any reason. This means that anyone who wants to seek relief from their creditors in the form of a payment plan may do so by using chapter 13.

During a chapter 13, a debtor has certain responsibilities to uphold. When filing a bankruptcy petition, a person has to submit a list of all of his or her creditors, as well as all income, assets, and expenses. Those few things are what will determine how much and over what time frame the debtor must pay back their debts. Additionally, before a debtor files, they must submit proof that they went through approved credit counseling classes, and the last six months of pay stubs from his or her employer. A debtor must submit prior years tax returns, and any interest that has been accrued on student loan accounts.

Chapter 13 can help you get out of debt in an organized way, in equal installments over a period of time. If you are in over your head in debt, and you do not want to go the route of a chapter 7 bankruptcy, you may want to consider a chapter 13 bankruptcy. It looks better on your credit report and you will be able to pay off the debts that you owe. Depending on the creditor, you may still be able to keep your accounts open with them.

For many people, chapter 13 is a very good form of debt relief. There are many reasons a person would want to file a chapter 13 instead of a chapter 7. Some of those reasons include having a more positive credit report, and the feeling that they are paying back the debts they owe. They feel more responsible doing this instead of taking an easy way out.

When you file chapter 13 bankruptcy, you do not have to worry about your creditors harassing you with their phone calls and letters any more. By law, once you file bankruptcy, creditors are legally prohibited from contacting you. They may not try to collect on your accounts anymore. Best of all, they cannot garnish your wages.

Imagine what the news stories would sound like if everyone in the country decided to change their life styles just enough to stop using credit cards. If everyone put themselves on a budget and got rid of whatever expense was dragging them down. What a revolution that would be.

Evaluating your finances and getting your budget back in the black is going to be more important than ever in the coming months. Finding those expenses that are truly not necessary and putting some money aside or paying off your debts could mean the difference between weathering the storm and being ruined.

1. Take a look at what you are making on an average per month basis right now and don’t lie to yourself if you have an irregular income. What are you really taking home each month?

2. Write out on a piece of paper what you spent last month in each category of expense. Rent, Food, Gas, Insurance ect.

3. Add up all of the expenses and identify the surplus or the lack.

4. What categories could be reduced or eliminated to give you at least a $300/mo surplus? This might not sound realistic to some but find out what it would take to save at least 3 Benjamin’s

5. Now systematically cut each expense through negotiation, discounts, and closing accounts until they are at a minimum.

6. Identify if you need more income to reach the $300/mo goal or if the cutting of expenses did the trick.

7. Look for short term increases in your income. Garage sales, extra jobs, overtime ect.

8. Get your family on board. Let them know your plans. Show them that short term sacrifice can mean big future benefits.

9. Save only a little money for emergencies at first. About $1500

10. Then take all extra monthly money and pay down you debts in the fastest order. Use your tax returns, gift money, garage sale money and every dollar of your surplus except your $1500 emergency fund to get you out of the rat race!!!

I know all of this sounds over simplified but I think with a little positive attitude and a desire to change our personal situations, this country can be greater than it all ready is and we can reap it’s benefits for ourselves and truly afford to give to others.