Thousands of Americans today are considering bankruptcy, as their paychecks are spread too thin between pay periods or paychecks may not be coming in at all. There are many honest reasons that an individual or family may need to liquidate their assets and remove their debt legally. Jobs are lost, tragedy strikes, or any economic woe may bring about the inability to get debt paid off in a timely manner. Bankruptcy laws are in place to help victims of unexpected circumstances start their financial state of affairs over, by removing debt. For Americans that have truly had difficult circumstances, considering the various options may be critical to the stability of their families and financial future.
There are also those that have over-extended themselves and are now drowning in excessive debt, unable to make their minimum monthly payments. Because of the increase of filed bankruptcies in the U.S., new laws are making it harder for families to qualify for these legal proceedings. There are alternatives to legally negating debt, before considering bankruptcy. Consumer counseling agencies and debt help companies can walk consumers through a series of steps that will lead to debt pay off. Investigating the various options available will be time well spent, and consumers will have the satisfaction of knowing that they took care of their obligations.
However, when there is no possible way for consumers or businesses to practice financial responsibility, then knowing the different options available will help in choosing the right course to take. The types of bankruptcy that most individuals opt for include Chapters 7 and 13. Most Chapter 7 filings are filing with no assets, or with little that could be sold to pay off debt. Laws are determined by states, but most states allow some assets to be protected, such as home equities, cars, and household goods. If, however, some assets are kept, the petitioner must continue to make timely payments. Those who file for a Chapter 7 may only file every six years and discharges can take up to six months from the date of the original filing. Most of the financial legal proceedings filed in the U.S. by individuals are Chapter 7 types of bankruptcy.
With Chapter 13 types of bankruptcy, consumers have the option of adjusting finances. Chapter 13 filings can stop collections and foreclosures temporarily, giving the filer time to formulate a financial plan to pay off debt over a certain period of time. Restructuring home loans and lowering interest payments can be part of the plan involved with these types of bankruptcy filings, as consumers work at taking care of obligations. All repayment plans must be approved by legal court proceedings.
Other filing options include Chapter 9, which allows for the reorganization of debt overseen by municipalities and Chapter 11, which also allows for debt restructuring, but with total debt limits that are higher than a Chapter 13. Anyone or any business considering bankruptcy should contact an attorney to get more information on the different types of bankruptcy and discover what chapter filing may be best for individual situations.
Filing bankruptcy can have very negative results on a credit report. Credit reports are essential to operating in today's economy. To qualify for home loans, credit cards, some insurances, and in many cases, certain jobs, a credit report must show financial responsibility. Consumers will need to protect their credit histories by keeping debt paid in a timely manner. A bankruptcy can stay on a credit report for up to ten years, so anyone seriously considering bankruptcy will need to keep these facts in mind.
The Bible has much to say about finances and financial responsibility. While many Chapter filings are last resorts for those in crisis, it is important to try and keep debt at a manageable level, knowing that at anytime, financial situations may change. Christians must have financial integrity because God's Word is specific about the perils of debt troubles. "The rich ruleth over the poor, and the borrower is servant to the lender." (Proverbs 22:7) Another verse that teaches the truth about money is 1 Timothy 6:10 which says, "The love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows." This verse is teaching the reader that money is not evil, but the pursuit of money and material gain can lead to poor decisions, not only in the financial arena, but in a personal walk of faith as well.
There are sources online through the Internet that can offer further information about the legal proceedings of bankruptcy. Anyone considering bankruptcy should conduct a thorough research and make sure that they completely understand all judicial proceeding involved. Those researching their debt options should also have an understanding of what consequences could result from negating debt through legal means.
http://www.christianet.com/bankruptcy/consideringbankruptcy.htm
