Women & Money: When to File Bankruptcy

Chapter 7 and Chapter 13 should be your last resort

monthly expenses to help the trustee determine your monthly spending. You will have to pay a filing fee and court fees.

If you hire an attorney, you will have to pay attorney fees, court fees, and a filing fee. If you cannot afford to pay attorney fees, you can search for free legal services to assist with the filing process.

Obtain a copy of your credit report from Equifax, Experian, and TransUnion, and make sure all accounts included in the bankruptcy report a zero balance and the account status indicates  “included in Chapter 7 or Chapter 13”, “included in bankruptcy,” or something similar.

Also, check your credit reports for duplicate listings of accounts included in the bankruptcy and request the duplicate entries be removed.  The IRS gets a report of all bankruptcy filings and may consider as income any debt from which you are released, and you may be taxed on any amount over $600. You may receive a 1099c form to report the amounts over $600.

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  • anthony justice

    Ms. Freeman,

    I wrote a response early today, regarding yesterday’s credit issues article. WHat is the effects of Bankruptcy on future credit? How does an individual recover and adjust lifestyle habits that contributed to their financial situation? Could you view my response from yesterday and include that reply with the all encompassing answer.

    Anthony Justice

  • Renee Jones

    Hello can you tell me how bankruptcy affects a homeowner. Would Chapter 7 or Chapter 13 be better as a homeowner? I’m contemplating filing bankruptcy but I want to be able to keep my home but at $1,600.00 a month payments it’s really becoming hard to manage.

  • trina

    The amount on my credit report only totals to about 3,000 dollars but I cannot get any loans because of bein delinquent. What could I do to get help.

  • Hi Renee, a bankruptcy stays on your credit report for 7 to 10 years. I recommend contacting your mortgage loan servicer, http://www.hopenow.org or a HUD counselor at http://www.hud.gov/offices/hsg/sfh/hcc/fc/ to get assistance.

  • Hi Trina, there are several things you can do to pay down the debt.

    1. Pay your bill as soon as you get it and then continue to send payments as you get extra money to pay the debt down faster
    2. Reduce expenses as much as possible
    3. Get a part-time job
    4. Sell unused items on eBay
    5. Buy used vs. new
    6. Buy items in bulk, on sale, use coupons or shop at discount stores
    7. Buy needs vs. wants
    8. Follow the Voluntary Simplicity theory – don’t buy anything new except for food and other basic necessities
    9. Use recycled items at http://www.freecycle.org
    10. Prepare comfort foods such as: soups, stews, casseroles, meatloaf, tuna salads, breakfast food for dinner, sandwiches for dinner, Ramen noodles, etc.
    11. Live like a college student

  • Deborah Ketter

    Hello, I am writing because I have filed bankruptcy twice, the last time was in 2004. Both were Chapter 7 and had been discharged. I had family issues and had to move back to Delaware and I went from a $48,000 a year job to a $7.00 an hour job and ended up back in the toliet again. Upon moving back here, I found out that I had a personal injury case from 1995, that I wasn’t responsible for but the person used my car and that totals over $40,000 a year,not to mention the bills that I had in Georgia and student loans and day to day living. I so desperately want to own my own home, one day, but I feel like I’m drowning because I make enough money just to maintain my living expenses and not much more. I had gotten my score up to almost in the 700’s in less than a year. Now, I don’t even know where to begin and I know that I can’t file again until 2010. I am not a dead beat on paying my bills, but when family emergencies come up, I have to be there to take care of my kids. Please help. I’m looking thru tear stained eyes because I don’t want to continue putting my money in the drain paying rent to someone and not able to invest like I know I should be able to. I’ve been looking everywhere for a part-time job or even another full-time job, but no one’s hiring and the last time I tried working two jobs, I almost lost my life in a car accident.

  • dwill1999@hotmail.com

    What can you do to rebuild your credit during that seven years the bankruptcy is on your record?

    • The single most important thing you can do is to pay all of your bills and debts (especially any remaining credit accounts you may have) ON TIME (ideally 2-3 days before due) and EVERY TIME. That way, as the seven years passes, the bankruptcy looks more like an exceptional aberration, and that you have a track record of being trustworthy and responsible with your financial and debt obligations. Making this your permanent approach to how you handle your money will also reduce the likelihood that you will ever have to file for bankruptcy again.