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FILING FOR BANKRUPTCY
Filing for
bankruptcy should be your last resort for resolving
your debt. A bankruptcy will stay on your credit
file for ten years, resulting in some extreme negative
effects to your credit. It is important to note that
there is
life after bankruptcy.
However, if your income is not enough to pay your debts
and/or you need public assistance to help pay for food,
filing for bankruptcy may be your only solution.
Below are some more facts about how bankruptcy works.
If you are considering filing for bankruptcy,
speak to
a lawyer for free.
Please note that no matter which type of bankruptcy you
file, you can only file for bankruptcy once every seven
years. The most common types of bankruptcies for
individuals are Chapter 7 and Chapter 13 bankruptcies.
**Before you file, please examine the article detailing
options to consider before bankruptcy.
Chapter 7
When you file for Chapter 7, your assets are sold to your
creditors to settle your debts. What assets can be sold
will depend on what state you live in. If you are a
homeowner, your house does not have to be sold. If you
own a car, it likely will not have to be sold. However,
if you own two cars, you will have to give one up.
All of the earnings from the sales of your belongings are
divided amongst your creditors in
priority under the law. However, your lawyers will always
get paid first.
No matter how much of your debt you
actually repay, the total accumulated debt amount is
eliminated. However, there are certain types of debt that
can not be eliminated when you file for bankruptcy, i.e.
student loans, child alimony and child support.
**You must continue making your mortgage payments when
you declare bankruptcy. Otherwise your home will go into
foreclosure. You must also continue making auto loan
payments. Otherwise your car will be
repossessed.
Chapter 13
When you file for Chapter 13, you are agreeing to repay
your debt, at a negotiated price, over three to five
years. During this time you are still obligated to pay
all of your current bills. However, your disposable
income must be used to pay the debt that you claim when
you file for Chapter 13 bankruptcy.
In order to file for Chapter 13, you must encompass a
regular income. The amount of unsecured debt that you
have must also not be more than $269,250. Your secured
debts can not be more than $871,550. Learn more about
what
secured and unsecured debts are.
You should consult with a bankruptcy lawyer when
determining which type of bankruptcy is best for
you.
Filing for bankruptcy is not a sure thing for debt
elimination
The courts can conclude that you have enough money to pay
your debts without filing for bankruptcy. Also, when
filing, don't try and be sneaky about the money you have
or the assets you own. If the judge thinks you are trying
to 'game' the system, they will through your claim out.
You can also be fined and thrown in jail if you lie to
the courts.
Changing your mind after you file
You are allowed to change your mind after you file for
bankruptcy. However, the court must decide if your
withdrawal won't hurt your creditors.
How long does it take to complete a bankruptcy?
Chapter 7 bankruptcies take 3 - 6 months. Chapter 13
bankruptcies usually are set-up for no more than five
years. Remember that all bankruptcies stay on your report
for 10 years.
The long-term effects of filing for bankruptcy
When you file for BK, you are starting fresh with
your creditors. However, as mentioned, any bankruptcy can
stay on your credit report for 10 years. Although not
impossible, getting approved for certain of loans and
credit will be hard if you have an active bankruptcy.
Since many employers are now doing credit checks, active
bankruptcies can also hurt your chances of getting hired
for certain jobs. Why? Because a bankruptcy can be looked
at as a sign of irresponsible behavior.
We can help you determine if bankruptcy is the best
course of action for you!
Simply fill out the short
debt evaluation form here. We will help you
make a wise financial decision! If you are considering
filing for bankruptcy,
speak to
a lawyer for free.
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