Bankruptcy - the dreaded word! Unfortunately, in today's fast-paced, materialistic society, this legal procedure is being pursued at an alarming rate. Bankruptcy law firms, credit counseling services and even do-it-yourself bankruptcy kits are advertised everywhere.
No one in their right mind wants to file for bankruptcy, but in the end this procedure could be the best decision they can make for themselves and their family. Depending on the type of bankruptcy chosen - Chapter 13 or Chapter 7 - one may be able to keep everything they own and begin a new financial life.
Let's look at the first type - Chapter 13. Chapter 13 involves a list of all creditors, both secured and unsecured. By secured debt, we mean debt that is secured by property - one's home, car, etc. Unsecured debt is just what the term implies - unsecured. These debts would include credit cards, personal loans, etc. Under a Chapter 13 petition to the court, usually secured debt is left as is, in other words will be included in the plan to be paid in full. Unsecured debt will be dealt with by petitions from each creditor to the court. The court will make the final determination as to how much of each debt will be paid. Once these amounts are determined by the lawyers involved, a 1, 3, or 5 year plan is developed to help the debtor pay down the debts owed. Chapter 13 bankruptcy is normally recommended for those who are about to lose their home to foreclosure. Many times, unsecured creditors will not even show up at the required creditor petition meetings and will, therefore, forfeit all debt owed to them.
Chapter 7 bankruptcy is handled in a different manner altogether. This type of bankruptcy allows one to keep property already paid for. In some cases, if foreclosure is imminent, one may be able to keep one's home while, in return, give up other assets such as automobiles, possibly furniture or other property that is considered secured debt. Chapter 7 bankruptcies may seem extremely harsh, but remember, one will be able to start over with a clean slate.
Both chapters of bankruptcy require a lot of paper gathering. If one uses a bankruptcy lawyer, a package is usually provided in order to provide the lawyer with all required information needed to file the petition to the court. This information consists of all personal data about oneself such as address, phone, social security number, work information, wages earned, etc. Plus the firm needs a list of all creditors. Please remember, leaving even one creditor off this list can mean the judge may dismiss the case outright! Do not LIE!
There are self bankruptcy kits available online and off for one to use if one so desires. They are quite inexpensive, but may require more work than one would like to do by oneself. Therefore, a good lawyer specializing in bankruptcy law is highly recommended.
Bankruptcy should be avoided at all costs, but if all else fails, it is an option. One should probably consult a good credit counseling service first before pursuing the dreaded bankruptcy route. If you chooses this route, use a service that is non-profit such as the Red Cross or other non-profit organizations. Please be aware, there are many credit counseling scams out there.
To conclude, bankruptcy can relieve a lot of stress and can be a fresh start for anyone suffering from heavy debt. But, please use it only as a last resort when everything else fails. Plus, once bankruptcy has been incurred and discharged, use caution when re-establishing credit so you does not have to repeat this process again down the road.
http://bankruptcy-guide-to.com/a/333514/Bankruptcy+-+The+Dreaded+Word!.html
No one in their right mind wants to file for bankruptcy, but in the end this procedure could be the best decision they can make for themselves and their family. Depending on the type of bankruptcy chosen - Chapter 13 or Chapter 7 - one may be able to keep everything they own and begin a new financial life.
Let's look at the first type - Chapter 13. Chapter 13 involves a list of all creditors, both secured and unsecured. By secured debt, we mean debt that is secured by property - one's home, car, etc. Unsecured debt is just what the term implies - unsecured. These debts would include credit cards, personal loans, etc. Under a Chapter 13 petition to the court, usually secured debt is left as is, in other words will be included in the plan to be paid in full. Unsecured debt will be dealt with by petitions from each creditor to the court. The court will make the final determination as to how much of each debt will be paid. Once these amounts are determined by the lawyers involved, a 1, 3, or 5 year plan is developed to help the debtor pay down the debts owed. Chapter 13 bankruptcy is normally recommended for those who are about to lose their home to foreclosure. Many times, unsecured creditors will not even show up at the required creditor petition meetings and will, therefore, forfeit all debt owed to them.
Chapter 7 bankruptcy is handled in a different manner altogether. This type of bankruptcy allows one to keep property already paid for. In some cases, if foreclosure is imminent, one may be able to keep one's home while, in return, give up other assets such as automobiles, possibly furniture or other property that is considered secured debt. Chapter 7 bankruptcies may seem extremely harsh, but remember, one will be able to start over with a clean slate.
Both chapters of bankruptcy require a lot of paper gathering. If one uses a bankruptcy lawyer, a package is usually provided in order to provide the lawyer with all required information needed to file the petition to the court. This information consists of all personal data about oneself such as address, phone, social security number, work information, wages earned, etc. Plus the firm needs a list of all creditors. Please remember, leaving even one creditor off this list can mean the judge may dismiss the case outright! Do not LIE!
There are self bankruptcy kits available online and off for one to use if one so desires. They are quite inexpensive, but may require more work than one would like to do by oneself. Therefore, a good lawyer specializing in bankruptcy law is highly recommended.
Bankruptcy should be avoided at all costs, but if all else fails, it is an option. One should probably consult a good credit counseling service first before pursuing the dreaded bankruptcy route. If you chooses this route, use a service that is non-profit such as the Red Cross or other non-profit organizations. Please be aware, there are many credit counseling scams out there.
To conclude, bankruptcy can relieve a lot of stress and can be a fresh start for anyone suffering from heavy debt. But, please use it only as a last resort when everything else fails. Plus, once bankruptcy has been incurred and discharged, use caution when re-establishing credit so you does not have to repeat this process again down the road.
http://bankruptcy-guide-to.com/a/333514/Bankruptcy+-+The+Dreaded+Word!.html
