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If you’re filing Chapter 7 money is no doubt a huge stress for you. Being told you’re going to have to pay an attorney and filing fees can be overwhelming when you’re already in a state of financial distress.
And it’s not like you can take out even more credit to pay for the legal proceeding that is going to wipe away all your debt!
But stop and take a deep breath. There are a few ways to get this done.
Take a moment to add up all the payments you’re making on all your debts right now. While you might want to continue paying debts that help you survive, like a car loan or a house loan, missing all those other payments probably won’t impact your life much.
If you put all that money aside to pay for the bankruptcy instead, how many months would it take you to be ready to file? Chances are you can get the job done in 1 to 3 months.
One mistake we see people make is they scramble trying to pay creditors for a long time before they finally file for bankruptcy. Why throw that money away when you can put it towards wiping out your debt?
See also: Is it A Good Idea to “Settle” Your Debt?
Family Members – If it’s a Gift
Now is not the time to take out a loan from any of your family members. But if a friend or family member is willing to help out, there’s no law against it. You do, however, have to report the gift so it may be included in your Chapter 7 means test.
The money needs to be a gift though, not a loan. If it’s a loan, with any expectation of repayment, it will have to go onto the bankruptcy schedules, whereupon your family member or friend will be treated like any other creditor.
Think About Your Tax Return
If you’re expecting a big tax refund next year that could solve the entire problem by itself. Instead of using that money to tread water a little bit longer you can use it to end your debt for good.
And since some scenarios allow a creditor to take that money, putting it toward your bankruptcy is more than wise.
We usually see a surge of filers in January and February as tax returns come in. Starting the New Year with no debt would be a nice way to begin!
Remember, the Initial Consultation is Free
If you’re still on the fence about whether you should file for bankruptcy at all, give us a call.
We can take a long look at your financial situation and give you our best opinion about what you should be doing, and why. This may be the wrong time to spend money on bankruptcy…or it may be exactly the right time. You won’t know unless you call.