What Are Your Living Expenses Like After Going Bankrupt

What Are Your Living Expenses Like After Going Bankrupt?

There are three ways to legitimately take care of debt over $10,000 that you have accumulated.

They are debt consolidation, debt reduction and bankruptcy. Both debt reduction and consolidation involve making arrangements with the credit card companies through a financial officer, but a bankruptcy is completely different.

Bankruptcy is a state action which involves assessing your property value and your debt, and then declaring either a Chapter 7 or 11 bankruptcy. Since this is a legal action, you must secure an attorney to fill out the paperwork and submit it to the judge. Depending on where you live, this will be approximately $1500 - $2000, plus filing fees. Before you try to find out what your living expenses will be after going bankrupt, the first thing to do is to determine what will be counted a liability.

Once you have an attorney, he or she will walk you through the paper work. There is a long inventory file which must be filled out and this includes everything that you own. Bank accounts, and any property that you own, are accounted for and run against the debt loss you have. This leaves very little for living expenses after going bankrupt.

There are a few items that can’t be used, like a vehicle under $10,000 which is used by the family, and relatively inexpensive housing. If you own two houses, you will have to sell one to go towards the debt. You will have some living expenses left after going bankrupt, but it will be much tighter than previously unless you learn to stay in a budget.

A bankruptcy stays on a credit report for 10 years and that means most companies won’t give you any credit until the time is up. After going bankrupt your living expenses will be down to the bare minimum as you start to build your accounts back up again. With your car, you can go to work and earn money to live on. Most bankruptcies do not take care of past electric, telephone or cable bills, or your mortgage either.

So, even after going bankrupt, there is a tightening of the belt as you and your family struggle to pay off the other bills. You will remember a bankruptcy in your family for a log time, but you will be making a clean start in your finances, and with the way you handle money.