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About bankruptcy
t is this an option that you should
actually follow through with. Bankruptcy is not something that you should
take lightly, you need to realize just what bankruptcy will cost you.
Bankruptcy should always be your last resort.
Bankruptcy will affect your credit rating is a huge way. In fact, it will destroy it completely and your credit rating will stay in bad shape for at least 10 years. Not all of the states are the same in their bankruptcy laws either. This could mean the difference between keeping your house and car and losing them. Before you file for bankruptcy, no matter how bad off you are, you will need to learn all of the ins and out of bankruptcy.
There are two forms of bankruptcy Chapter 7 and Chapter 13. The most common by far is Chapter 7 bankruptcy. With this form of bankruptcy you will be handing over or selling your debts in order to get rid of your current debt. This is a good solution for those who are determined to file but who do not have much in the way of assets. If you have a lot to lose Chapter 13 may be a better option for you.
Generally garnishments will have an end put to them when you file for bankruptcy. There are exceptions to the rule though. For instance in some places you will be able to keep your home equity and other states do not. You need to learn about the laws in your state to see just how you will be affected. Some states will even make you sell your wedding rings in order to pay your creditors more money while others will allow you to keep your home and you car.
You cannot file for bankruptcy and then file again as soon as you get back into trouble. You can only file once every 6 years for Chapter 7 bankruptcy. Do not wait until you have filed for bankruptcy to see which assets you will be allowed to keep and which you will have to get rid of. You need to know that right away.
Once you have made your final decision and it is to file for Chapter 7 bankruptcy then you will have to give a list of your assets and your debts to a bankruptcy trustee. They will tell you what has to go and what can stay. Your creditors will be able to go over everything as well and they will then be able to dispute anything they see as lies in your list.
While Chapter 7 can get rid of many of your debts, you are going to find that there are some that are there to stay. For instance you will not be able to erase alimony, child support, student loans, tax liens, fees from criminal activities and many student loans. These debts will still be with you after Chapter 7, so if these are the debts you are trying to escape you need to realize that Chapter 7 bankruptcy is not going to do you any good at all.
When it comes to your credit and it's status you will find that Chapter 13 is going to do you less damage in the long run. The more debt that gets wiped in Chapter 7 the worse your credit is going to look.
Chapter 13 bankruptcy is more like a form of debt adjustment. With this form of bankruptcy you will be planning a way to eliminate all of your debt the right way. When you are planning your Chapter 13 strategy you are planning to pay all of your creditors the amount they are actually owed and all within a 3 to 5 year period.
When you file for Chapter 13 you will not be terminating any of your debts you will be re shaping the way that you pay for them. You are coming to an agreement with all of your creditors that will suit them well enough. At least this way they will get the money that they are owed, if you had filed for Chapter 7 they might not have. All of your priority debts will be paid in full, as will your secured debts but your other personal debts like credit cards may have to take a bit of a hit.
Chapter 13 bankruptcy has some other positive aspects that make it interesting. Some of your tax liabilities may be taken car of as well. The older your tax debt is the higher your chances of not having to pay for them.
A creditor does not have to accept your filing, if they have any objections to it then they will have to let the courts know. Oftentimes those who start out planning for Chapter 13 have no choice but to switch over to Chapter 7 because their creditors will not accept Chapter 13. This is often because there are limits to how much money you can owe if it is Chapter 13 that you are thinking of.
If however your plan is agreed to by all parties then the amount of disposable money or income that y9ou have will be handed out to the creditors who having it coming to them according to your repayment plan.
Before you file for bankruptcy no
matter what Chapter it is going to be you need to get in touch with a
lawyer. You do not want to be dealing with bankruptcy without one because
it is a long and difficult road. Do not choose just any lawyer either, you
need to choose a lawyer who specializes in bankruptcy
filings.