File Chapter 7 and Use the Bankruptcy Law to Your Benefit
26 Feb 2010 • 11:08 AM • BusinessWhen filing bankruptcy, it also depends on where you live, both your state and federal laws allow some exemptions which are items that you own that you may keep. Your second choice is filing under the Chapter 13 Bankruptcy Law, called a wage earner plan. In this instance, you are basically telling the court that you have consistent income, but it is not enough to make the regular payments on the debts you have. You are asking the court to arrange a modified, lower payment schedule, but not to fully erase your debts. This is usually the option that the court requires if you make too much income to qualify for chapter 7. If you have trouble deciding you should consult a professional that can help you decide which option is best for you.
After filing bankruptcy you should also be eligible for an auto loan since it will be secured by the vehicle. Many auto dealers will self finance their own vehicles for you, even right after your discharge. Since these automobiles are their own inventory, they can afford to finance the purchase and generate continuing income from interest earned. After your bankruptcy is finished and you have a new bank account, you can also obtain a savings secured loan by pledging all or part of your balance. This is a very inexpensive loan, the interest rate usually only about 2% above the savings rate and while technically not providing you with new cash, it will quickly help you reestablish your credit after filing bankruptcy. This is an important step to getting your life back on track.
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