Chapter 7 bankruptcy can be a very confusing, and yet, a serious matter at the same time.  If you have questions, when it comes down to Chapter 7 bankruptcy, I kind of wanted to make an easy to read FAQ that can help you understand what’s going to happen during the process.

What’s the difference between Chapter 7 and Chapter 13?

Chapter 7 is a pretty straight forward bankruptcy, and picture it as a “fresh start.”  You’re going to sell all of your assets, as with a Chapter 13, you’re going to be able to keep some of your assets.

Are all my bills gone now?

It will all depend on how the judge sees your case.  By law, you will always have to pay student loans back, there’s no way around it, and there can be other potential companies that can still come after you, such as a car loan.

Is this going to be public?

This will remain on your record for at least 10 years.  It will be public records, so when someone does run a credit check on you, it will show up.  Again, it will remain there for 10 years.

Can I keep my big items such as my boat, and car?

Even if it’s paid off, the trustee’s can liquidate them, and spread the assets among the creditors you owe.  It’s only fair to the people that you owe, and they will milk everything out of you, to make sure everyone gets as much as possible.

How many times can I file?

You can only file every 8 years.  When you go in, and file for a second time, you’re going to find that it’s going to be a lot harder to get through.  It’s important that you learn your lesson the first time!

Can I get any credit now?

Sure, you can still get secured credit, and you will still get credit card offers.  The reason the companies will still come after you is because you can’t declare for another 8 years.

Can I get fired from my job?

No, you can’t.  If the employer does fire you because of this, it’s because of discrimination, which is against the law.

What loans will I always have to pay regardless of this?

Loans such as your student loans, child support, lawsuits related to drunk driving, and any government owed money such as taxes will always have to be paid back.

Repaying your loans takes a long time, but if you have a plan in mind, and you know when your bills are going to be paid off, it’s going to make it a lot easier for you to get your bills out of the way.

When I was in debt back in the day, I wanted a plan.  If you just keep throwing money at a bill, and you don’t know when it’s going to be paid off, you won’t have a plan in mind, and it’s really going to discourage you.

In order to get a plan on the road, I wanted to show you some of the best loan repayment calculators on the market that can show you how much you’re going to have to pay to reach your timed goals.

• FinAid Loan Calculator: This is designed for college students, but anyone can really use it.  Input the loan balance, the interest rate, and more to get a nice payment schedule.
• Bankrate Loan Calculator: This is a cool calculator, because you’re able to “add extra payments”, and it can show you how you can pay off your bills even faster, when it comes to knocking down your debts.
• SallieMae: The SallieMae calculator will show you your monthly payments, as well as your interest payments.  It will also show you all of the different plans that you can use, and compare.
• LoansCalculator: Another great, simple tool that you can use.  Input all of your data, and get a full amortization table.  It gives you a great idea on what you should have to pay back over the time of the loan to reach your goals.

Try these calculators, and more.  You’ll want to write out your game plan, and know when your bills are going to be paid off.  As long as you have a goal, you’re going to find that it’s going to be a lot easier to focus on your debts.

Being in debt is tough enough, but if you received a court summons at your door for the debt you haven’t paid yet, your life is going to be a little rougher.  Today, I received an e-mail from an anonymous reader.

I just received a court summons to show up in court, and it’s in a few weeks.  I have no lawyer, I don’t have any money, and frankly, I’m scared! What do I need to do?  I’m desperate for help!

First off, there’s nothing to really worry about.  Summons are served to thousands every day, and you were just one of the very few unlucky people to receive one.

The first step that you’re going to want to take is by finding a lawyer in your area that deals with bankruptcies, and debt.  It will be stupid not to get one.  Yes, it’s going to cost you even more money, but it’s going to save you a lot of hassle down the road.

Next, don’t even think about not showing up.  This is going to make it even worst.  The worse thing that you can do is just ignore it, and not show up.  If you don’t show up to the courthouse, they can do things such as garnishment of your wages, and more without you even knowing.  You want to show up, and defend yourself.

When you show up to the court, you just want to be honest.  Explain to the judge on why you’re not paying your bills.  As long as you have a good reason (health, job loss, etc), you’re going to find that judge will side with you.  A lot of the times, you’re going to find out that the credit company will be more than willing to work out a lump sum payment that can save you 60-75%.  This scenario happens, take advantage of it!

I don’t want to give out too much legal advice, since I’m not a lawyer, but there’s two things that are smart.  You want to get a professional lawyer, and you don’t want to ignore this!  In fact, by showing up in court, it can save you thousands of dollars in the long run!

Finding yourself piled with bills to the ceiling can be very discouraging, but did you know that there are great ways out there, when it comes to erasing your debt.  If you were like me in the past, you probably looked at those piles of bills, and just said, "forget it."   I know, this can really drain you, and you probably think that the end will never come near.  Thankfully, if you follow a few of these tips, you can erase a lot of your debt by the end of the day today!

Gather up all of your bills

The first thing that you want to do is gather up all of your bills.  If you owe them money, you’re going to want to mark this down.  If you don’t have your latest statement, you can most likely log in, and get your information on there.  You will want to set these all in a nice pile.

Organize them from the highest to lowest

Since we want to focus on your most expensive bills first, we will want to put the highest total bill on the top, and the lowest one should be on the bottom.  We want to focus on getting rid of that higher bill first, so that your "total debt" number goes down.

Get ready to contact the companies

Now, I hope you like talking on the phone, because this is the next step that you’re going to have to do.  What you’re going to want to do now is call up the credit card companies, or whatever loan company it may be, and work out some sort of lump sum loan.

For example, let’s say that your bill is "$2,500", and you have $1,200 sitting in the bank.  Call them up, and tell them that you want to settle for $1,200.  Start low, and see what they can do for you.  Explain to them that you can’t pay this off in full, because of financial means, and you’re willing to pay at least 30-40% in full to call it even.  Many big credit card companies will bite on the offer, and take you up.

Now, if they do take you up, you want to always make sure you get it in writing before sending out your money.  The letter should be something along the lines of "We’re settling your debt for $XXX."  Make sure you don’t send the money until this happens!

If you want to get more debt tips, try some debt tip help books online.  They will give you tips on ways to talk your way out of debt, and more.  By taking the time to study the process, you can easily save a few thousand dollars, I promise!

If we’re new to the whole credit card idea, there is a lot to learn.  We know that we need a credit card to help us build a good credit score, but somethings can be easily overlooked, like your interest rate for example.  You may be saying “I’ll be paying in full each month so it doesn’t matter.”  Although, that’s not always what happens.  Therefore, it is important to take a look at your rate.  Your rate can hurt your badly each month if you don’t pay in full each month.

How to Lower Your Credit Card’s Interest Rate:

Call – First of all, all you need to do sometimes is make a quick phone call to the credit card company.  Say you’re having trouble paying your bills and your interest rate is starting to hurt you.  They will then be able to lower your interest rate right then and there sometimes.  This could save you hundreds if not thousands in the long run.  So, all it takes is a quick phone call.

It is said that about 3 in 4 credit cardholders receive a lower rate due to just a phone call!

Prove – Over time you may notice that your interest rate is going down just because you’re using your credit card wisely.  This is like a pat on the back to you.  You treat them good, they will treat you good back.

Although there isn’t much you can do to get a lower rate, both of these will work.  If you feel like your rate is too high, let them know and be sure to tell them it will be hard for you to make payments if they don’t do something about it.  They’d rather have some money than no money at all.  So, make that quick phone call, or over time prove to them that you’re responsible and see your rate go down that way!