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In today's world many people sometimes get into some financial trouble and need some help. At one time or another can even happen to people who you would never expect to have credit issues, one alternative is filing for bankruptcy. Is this your best option and what exactly is it? We're going to take a look at it so you can better grasp if it's for you or not.
Bankruptcy was created by congress to help people in a bad situation get a fresh start in their lives if they got too far in debt. The burden lifted sometimes was a new lease on life for these people while others took it as an embarrassment to be filing for bankruptcy. There are many different options that you have which include Chapter 7 and Chapter 13. Both are part of the bankruptcy laws and each do different things. Chapter 7 bankruptcy is the most common type and involves liquidation of the entire borrower's nonexempt property. Whatever is obtained through selling of these assets than is distributed to the creditors that are owed? Now certain items under chapyer7 cannot be sold. These items include your house, car, tools of your work or business and certain personal items but remember the court has final say in these matters. Everything else can be sold though. Now remember these laws vary from state to state so always check into them before filing chapter 7 claims. Just like anything else in life you must meet certain requirements to file this claim. First you really must be in debt and can't afford to pay. You just can't file to get out of paying because you don't want to. No history of a Chapter 7 or 16 in the last six years can be on your record either. It usually takes around 70-75 days for the debts to be discharged after a meeting with your creditors is held. Chapter 13 bankruptcies are for people who don't want to lose their home or property they want to keep. Chapter 13 is different in the sense you pay off your creditors in a slow payment process usually up to five years where chapter 7 they are discharged, in chapter 13 they are not. Usually though you get a break as you pay a percentage of the debt owed, but you still must pay it back. The debtor submits a plan and the court decides if they will go with it based on many different factors. To be eligible for this type of filing for bankruptcy you must have more than 750,000 in secured debts and 250,000 in unsecured debts. This process can take anywhere from 30-45 days depending on the court and the laws of that state. Filing for bankruptcy is something that should be carefully considered as it will affect your credit rating for many years to come. Congress has made filing much tougher now and paying back your creditors have become more of the issue now than ever before. Bankruptcy should only be used as a last resort to get out of debt. For many filing for bankruptcy it's there only option. If you don't have too than don't, in the long run many times it's not worth it. It's nice to know though that it is there to help people who are deep in debt. Always consult a lawyer and debt counselors so you know what your best option is before taking any kind of action like bankruptcy. Jeffrey Meier of Jam727 Enterprises at http://www.Jam727.com offers information articles on Bankruptcy at http://www.jam727.com/bankruptcy2/bankruptcy_articles.htm |
