What is Bankruptcy?
If you are thinking about filing for bankruptcy due to the overwhelming burden of debt you should really think twice and weight out all your options. Ask anybody who's actually filed for bankruptcy and they can tell you that it's a long, drawn out procedure and could cause your credit score to drop through the floor. Regardless of your situation, or reason for contemplating bankruptcy, if you're thinking about filing a BK you should really consider every alternative to bankruptcy and consider what your options are. In 2010 there were 1,531,997 bankruptcy filings most of those filings were due to unmanageable credit card debt, and individuals or organizations living beyond their means.
If you are thinking about filing for bankruptcy due to the overwhelming burden of debt you should really think twice and weight out all your options. Ask anybody who's actually filed for bankruptcy and they can tell you that it's a long, drawn out procedure and could cause your credit score to drop through the floor. Regardless of your situation, or reason for contemplating bankruptcy, if you're thinking about filing a BK you should really consider every alternative to bankruptcy and consider what your options are. In 2010 there were 1,531,997 bankruptcy filings most of those filings were due to unmanageable credit card debt, and individuals or organizations living beyond their means.
Chapter 7
- Chapter 7 is frequently referred to as liquidation
- Takes 4 to 6 months from the date of filing to the last discharge
- You can only file chapter 7 once in 6 years
- Income must be less than the median income in their state.
- Depending on the state that you file you may be able to keep the equity of your home
- Personal assets will be liquidated in order to settle debts
- Normally Chapter 7 is for individuals that don't have a lot of assets, no income, and are under a burden of debt
- Will reflect on your FICO for ten years
- Lawsuits may be ongoing after you file
Chapter 13
- The amount that has to be paid on debt will depend on your income, not on how much is owed.
- There may be caps on the amount of debt
- One of the main benefits of Chapter 13 is it can momentarily halt the foreclosure process so you can take care of your debts.
- Will stay on your credit score for 7 years.
- Also referred to as a debt settlement
2005 Bankruptcy Reform:
October 17, 2005 marked a time for new bankruptcy laws to be implemented. The reforms required individuals to seek out credit counseling from a government approved credit counseling services agency within, at least 180 days prior to filing.
October 17, 2005 marked a time for new bankruptcy laws to be implemented. The reforms required individuals to seek out credit counseling from a government approved credit counseling services agency within, at least 180 days prior to filing.
What's the problem with bankruptcy?
A lot of debt settlement and financial experts agree that an individual should do everything within their power to avoid filing for bankruptcy. Bankruptcy is a tough process, and should not be considered as an easy way out. A bankruptcy can leave a disparaging mark on your credit report for up to 10 years, and will make it difficult for you to apply for loans, credit cards and a home mortgage in the future. There are other ways to take on your debt but a good first step if you feel that your debt is unmanageable is to seek out the help of a government approved credit counseling agency and find out exactly what your options are.
A lot of debt settlement and financial experts agree that an individual should do everything within their power to avoid filing for bankruptcy. Bankruptcy is a tough process, and should not be considered as an easy way out. A bankruptcy can leave a disparaging mark on your credit report for up to 10 years, and will make it difficult for you to apply for loans, credit cards and a home mortgage in the future. There are other ways to take on your debt but a good first step if you feel that your debt is unmanageable is to seek out the help of a government approved credit counseling agency and find out exactly what your options are.
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