How to Cope With Chapter 13 Bankruptcy

There are two basic types of bankruptcy for individuals, Chapter 7 and Chapter 13. Chapter 13 bankruptcy is for individuals and small businesses with a steady income and assets. Chapter 13 bankruptcy is not a free ticket out of debt. Even after filing for bankruptcy, the majority of your debt must be paid back.

Difficulty: Moderately Easy

Instructions

1. Know the ramifications of filing Chapter 13 bankruptcy. In the past, people filed bankruptcy with no problem. Today's new bankruptcy laws require you to pay back your debts and the bankruptcy goes on your credit report. The upside it that Chapter 13 reports do not stay on your credit report as long as Chapter 7 bankruptcy reports do.

2. Understand Chapter 13 bankruptcy. With Chapter 13, you retain real estate and other assets that are normally seized when filing Chapter 7 bankruptcy. Chapter 13 requires the filer to have a reliable income and some disposable cash.

3. Work with your trustee. Each person who files Chapter 13 is given a trustee who works with the filer to determine the amount of bills and income for the household. The trustee sets up a three to five year plan to pay off all the debt. Prepare all your bills and payment information before your meeting with the trustee. Make a list of all the bills that do not have copies such as gas, groceries, childcare and clothing.

4. Pay the bankruptcy payment on time each week or month. You have the option to send in your payment or have it withdrawn directly from your bank or pay check. Make the payments before they are due to keep your account in good standing.

5. Make a budget. Budget how much money you can spend each week. This helps you stay out of debt during while you pay off your bankruptcy. Stick to the budget once you pay off your debt. Budgets are the best way to stay out off debt.

6. Comparison shop and utilize sales and coupons. This is the best way to lower bills and live within a budget. Buy generic groceries and household products as much as possible. Cut coupons for items you use often. Shop at grocery stores with double and triple coupon days. Buy items that are on sale or on clearance.

[yonni]

on 2/16/2009 ....identify what is called your 'life position'. Most of these psychological techniques are well described in many psychology books but, '7 proven steps: how to defeat stress without going through the embarrassment of counseling', found at authorhouse.com puts them all together and more in the context of the financial crisis and in a day by day approach (day 1 to day 21). I felt it changed my outlook of life and gave me practical solutions--not fantasy but the other issues in the book about divorce, scandal also tackled in the book did not concern me so I had to skip some parts.

[yonni]

on 2/16/2009 I am one of the people who had a foreclosure and find these tips quite helpful.You also have to handle your FEAR. Fighting the fear IS KEY (arising from anxiety of deviating from the social norm of owning a house and leading a comfortable life). This fear may be exaggerated if one does not go through the process of 'intellectualization' early on--say the first two days. You have got to know the scale of your crisis and the 'major life crisis scale' may help one know their situation as may separating their wants from needs--hard if you do not engage in 'repression' Then do something about your diet--and avoid alcohol. Craft short-term and long-term goals. Identifying your personality and using your strengths will help a lot--you can do this in a detailed way on one found on www.personalty100.com. Then use the 'ok matrix' to identify what is called your 'life position'. Most of these psyc