New Year Finances

  1. Run all three of your credit reports.  Go to now and get your credit reports for free.  Many debtors do not realize the extent of their debt troubles until they actually run their credit report.  Please take a careful look and challenge any inaccurate information.  If information is inaccurate the credit bureaus are obligated by law to change or delete incorrect information. Also, they cannot report debts beyond the legal time limits. Chapter 7 bankruptcy is reported for 10 years and Chapter 13 bankruptcy is reported for 7 years.
  2. Assess your financial situation. What are your debts, expenses and income?  Write everything down. Be honest and accurate.  Who do you owe and how long will it take you to repay those debts at your current income?  If you find that you do not earn enough money to repay your debts within a reasonable amount of time, you may want to consider your bankruptcy options. Remember, you can repay your debts in Chapter 13 bankruptcy over a period of 3 to 5 years or discharge most or all of your debt in Chapter 7 bankruptcy.
  3. Take a look at your tax debt. Do you owe back taxes for the state or federal tax authorities?  If so, you need to think about how you will repay those debts within a reasonable amount of time.  While tax authorities do offer repayment plans, they have extraordinary powers to seize assets for unpaid debt.  If you are unable to repay your taxes, you may want to find out how bankruptcy can help you. Bankruptcy can partially or totally discharge some tax debts.
  4. If you’re facing foreclosure, check in with your lender now to find out your status. Many lenders are waiting until the New Year to file foreclosure on homeowners.  Don’t get caught by surprise. If you’re a renter, check the foreclosure status of your apartment/home. Many landlords are falling behind on their mortgages and as we reported earlier this year, many renters are being left out in the cold-literally. Remember, renters are protected from immediate eviction after foreclosure. Lenders foreclosing on a property must wait till end of lease or give 30 days’ notice to renters.
  5. Review your health coverage. Are you uninsured or under insured? If so, consider adding or updating you health insurance to avoid medical debt. If you can’t afford health coverage you may need to consider bankruptcy. Bankruptcy discharges debt which can free up more of your income for important things like health insurance.
  6. Watch out for rising credit card interest rates, fees and changes in terms of service. Yes, the CARD Act has passed and credit card consumers will enjoy many new protections; but credit card lenders want to undermine the law and increase their profits.
  7. Seriously consider bankruptcy if you find that you cannot repay your debts.  Filing bankruptcy in 2009 and discharging debt you are unable to pay may be the best way to get 2010 off to the right start.

Speak to a bankruptcy lawyer