Process of Filing Bankruptcy
The first part of the bankruptcy filing process is collecting all of your personal financial information. This will include a list of all your secured and unsecured, tax returns for the last two years, deeds to any real estate you own, car titles, and any other loan documents you may have.
What are the Bankruptcy rates? According to Scripps Howard News Service, nearly 1 in 60 housholds in the United States are bankrupt. This figure is based on the nearly 2.04 million people who filed for bankruptcy before the new bankruptcy laws took effect. Why is it so prevalent? Bankruptcy filings for the first quarter of 2006 slowed to a 20 year low, although the number of bankruptcies will expected begin to rise again later this year. Is the Borrower Liable? Once the bankruptcy proceeding ends, the borrower is no longer liable. This occurs when the bankruptcy court enters a discharge order in a Chapter Seven case or the borrower has paid the debts due to the credit grantors according to a plan in a Chapter Eleven or a Chapter Thirteen case. In legal terms, the court has discharged the borrower from the debts. The borrower then starts over again with a clean financial slate, but the record of the bankruptcy will remain on the borrower's credit record for up to ten years. What Are the Aims of My Creditors? The aim of most creditors (the one’s you owe money to) is not to make an individual bankrupt. Most bankruptcies have little in the way of compensation for unsecured creditors. The government services are more likely to petition your bankruptcy than, say, a trader you owe money to. Can Bankruptcy Help Tax Matters? Taxes are debts to a government agency much like debts you might have to individuals and companies. They are different from other debts, however, because the governmental agencies collecting these taxes have greater power over you and your property than other creditors have. Getting Out of Debt with Debt Consolidation Firms One of the best ways are to consult a Debt Consolidation Firm. Those are the experts who can help you sort out your financials professionally. Thus, we urge you to find out more about filing personal bankruptcy and the alternatives to them, such as looking up the various Debt Consolidations Companies. |
Will Filing Bankruptcy Affect Your Family?
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| Your wife or husband will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card they are probably responsible for that debt. However, In community property states, either spouse can contract for a debt without the other spouse's signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouse's signatures on contracts. But the day to day debts, such as credit cards, do NOT require both spouses to have signed. Your lawyer will be able to guide you in this regard. |
| Main Purpose of Bankruptcy The purpose of bankruptcy is to convert your possessions, and any wages you receive, into lump sum and installment payments for creditors. A debtors purpose to apply for their own bankruptcy is to form a moratorium (a group of creditors) to agree part repayment of all outstanding debts, and when the agreed repayment has been met, to have a ‘clean slate’. Avoiding Bankruptcy Avoiding Bankruptcy is something that everyone should try to do unless it is absolutely necessary. There are several ways that you can determine whether or not you can avoid declaring bankruptcy. Bankruptcy may be the best choice for you if you do not have a better way to pay off any of your bills, and if you do not think it is possible for you to ever get out of the debts that you owe. While borrowing money to pay off your debts may seem like a good idea at the time, it shouldn’t be your first choice. If you are having trouble paying your bills now, a new loan will only make your struggle to pay bills a harder one. |
Alternatives to Filing Bankruptcy
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| Alternatives to Filing Bankruptcy There is just no easy way to get out of debt, you have to face up to the consequences. A bankruptcy is not always the answer, as the effects are long lasting. There are four ways to handle debts that are out of control, listed in best to worst in regards to the effect it will have on your credit: If your credit isn't in terrible shape, can you reduce your other expenses, even if it means making hard choices or just change your lifestyle to fit your income? Some ways to do this: Alternatives to Filing Bankruptcy: 1. Selling the second car 2. Pulling equity out of your home 3. Applying for a non secured signature loan 4. Obtaining a loan from a relative 5. Selling your home and paying off your debts with the proceeds and then renting 6. Cashing out your 401K/retirement benefits 7. Selling family heirlooms, jewelry. Filing Bankruptcy - Final Solution If your credit is already gone or one of the above isn't an option, go through Consumer Credit Counseling Services. Check your yellow pages for the local number. In this way you're paying off your debts as if you were in a Chapter 13 bankruptcy, but you don't file a bankruptcy. Mandatory Credit Counseling No individual may be a debtor under title 11 unless they have, within 180 days prior to filing, received credit counseling from an “approved nonprofit budget and credit counseling agency”, either in an individual or group briefing. Said counseling agencies are to be approved by the U.S. Trustee. If a debt-management plan is developed, it must be filed with the court. Reduce Your Expenses! Reducing expenses is an excellent way to generate more money. Do a budget and see where your money is going! How much do you spend on lunches? Do you smoke? What if you quite smoking and saved all that money? What would it amount to? What if you took a lunch to work instead of spending $5.00 a day on lunches? What if you took your next raise and saved it instead of spending it? Warning: require_once(/home/hazel/carp/carp.php) [function.require-once]: failed to open stream: No such file or directory in /home/hazels/public_html/filingbankruptcy/index.html on line 355 Fatal error: require_once() [function.require]: Failed opening required '/home/hazel/carp/carp.php' (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/hazels/public_html/filingbankruptcy/index.html on line 355 |