Bankruptcy, Divorce, and The Wonderful Property Taxes

June 21, 2010 - PRLog -- I usually say the number one reason people file a Bankruptcy is a divorce and the number reason you should file a bankruptcy is that divorce. The reason it causes bad credit because now there are two house-holes with utilities, attorney fees, day care, child support and sometimes lots of alcohol. Sometimes at this point the credit cards have to be used just to keep up with the new utilities or just to but food and gas. As this goes on for any length of time the credit cards start building up and then you miss a payment so there is a late fee and then they raise your interest rate and the next thing the minimum payment is as much as your car or house payment. Now choices have to be made make the house or credit cards payment. A bankruptcy might be the only way to clean up the mess.
The reason people should consider filing after the divorce is, No matter what that divorce decree says about who should pay what debt the creditor is going to hold both of you responsible for the debt. If you are on the car loan and a year latter the car is reposed the creditor can come after either one of you. By filing the bankruptcy you will making sure what ever the other person has you will not be responsible for it.

People find that when they begin falling behind in their mortgage payments they tend to also fall behind on their property tax payments. In a Chapter 13 Bankruptcy you are able to take any delinquent property taxes and propose to pay them through your plan of reorganization.

There becomes a problem however, when people after they have filed, cannot afford to make the following years tax payments or their escrow accounts come up short. This is a problem, because many taxing authorities do not allow you to put in the property taxes that become due after the petition in bankruptcy is filed. Therefore, this leaves people with the uneasy task of working out payment arrangements with the taxing authorities and sometimes leading them down the same road that led them to bankruptcy to begin with.

It has always been my feeling that if the mortgage company escrows your property taxes it is a good thing to prevent the scenario above. The downside; however, is that the mortgage payment may increase to an amount that can be unbearable. However, by setting up an escrow account, you can be assured that the taxes will be paid and eventually you begin to get comfortable with the increased mortgage payments and are relieved of the burden of having to worry about the menacing date of January 31st.

For more information visit http://www.bankrupcy-alternative.com/on-job.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10750325-bankruptcy-buying-car-and-f... for your reading enjoyment.

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