Bankruptcy Basics

When the time comes to consider bankruptcy as a means to escape unmanageable debt, there are a few things you should know before moving forward. There are many myths that abound in regards to bankruptcy and what happens before, during and after you have filed papers to begin the process. Here we will cover a few of the basics of bankruptcy to help consumers navigate this often misunderstood legal remedy to debt. You need money to file for bankruptcy- Have you ever noticed how many situations in... 

Life After Bankruptcy

Eliminating debt is on the forefront of everyone’s mind these days. There are dozens of different strategies and methods of debt elimination you can try, however only one strikes fear in the hearts of most consumers- bankruptcy. Known as the last resort, the final option, the “worst case scenario”, bankruptcy today is much different than it was a few years ago. No longer having the option to completely wipe the slate clean and start over, more people are thinking twice before... 

Eliminating debt is on the forefront of everyone’s mind these days. There are dozens of different strategies and methods of debt elimination you can try, however only one strikes fear in the hearts of most consumers- bankruptcy. Known as the last resort, the final option, the “worst case scenario”, bankruptcy today is much different than it was a few years ago. No longer having the option to completely wipe the slate clean and start over, more people are thinking twice before filing for bankruptcy. That being said, bankruptcy is in fact the best option for a select number of consumers and contrary to popular belief- there is life after bankruptcy. Before you consider this drastic option, first understand what will happen when you file and what you can anticipate in the years to come.

What Is Bankruptcy?

Bankruptcy is a legal process where the person filing the request declares their inability to repay their debt as it currently stands. The two most common forms of consumer bankruptcy are Chapter 7 and Chapter 13 bankruptcies. When an individual files for a Chapter 7 bankruptcy it is often referred to as a liquidation which basically allows debtors to give up assets that are not exempt. These assets will be sold or returned to creditors in lieu of repayment. In a Chapter 13 bankruptcy, the person filing agrees to restructure their debt in a way that allows them to repay part of all of the debt under new and often longer or more forgiving terms. Your ability to repay your debt today and in the immediate future will determine which type of bankruptcy is right for your situation.

Life After Bankruptcy.

There is no denying the fact that life after bankruptcy can be difficult in terms of personal finance. Lenders will be less inclined to extend credit due to your history of not repaying loans per the original agreement. This poses an increased risk to lenders who are already leery of loaning money in a shaky economy.

When you file for bankruptcy, it will appear on your credit history for at least ten years. In addition to potential problems with lenders, you will also have to honestly answer the question, “have you ever filed for bankruptcy?” which appears on numerous applications for things other than credit. This may impact your chances of getting a job or approved for a number of other things in the future. When and if you qualify for credit in the future, you will undoubtedly see higher interest rates and less favorable terms than your peers who have not filed for bankruptcy.

As you can see, there are many negative consequences associated with filing for bankruptcy. The one positive that makes it worthwhile for qualifying individuals is the prospect of getting back on track financially and finally getting out from under an unbearable amount of debt. If you have exhausted all other options for debt elimination and find yourself in a position where you may never get out of debt without help, bankruptcy may be the best option for your situation. If this is the case, understand that you can repair and rebuild your credit in time. It is a long and often difficult journey, nonetheless, one worth taking if you can avoid the problems that got you in debt in the first place in the future.

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Why Bankruptcy Is Not The Simple Answer To Debt

Years ago, filing bankruptcy carried a social stigma that many people avoided like the plague. It more recent times, people began to figure that bankruptcy is the easy way out of their debts. However, the reality of bankruptcy is highly disruptive not only to your present financial situation but also for your future one. Also, bankruptcy courts are no longer as lenient as they may have once been. Simply filing for bankruptcy does not necessarily mean it will be granted and even if it is, not all... 

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The Differences Between Chapter 7 and Chapter 13 Bankruptcies

For many individuals in debt, bankruptcy is the last resource to help get out from under all-too-heavy financial burdens. In the past, bankruptcy was considered to be somewhat of an easy out but today there are much tougher bankruptcy laws and these changes make it more difficult to go through the process of bankruptcy unless you are genuinely qualified. When dealing with consumer debt, there are two main types of bankruptcies that will be available. Chapter 7 and 13 allow debtors to eliminate... 

Can Bankruptcy Stop Foreclosure?

With so many people struggling with debts and home foreclosures around the nation, many wonder what can be done to stop both the cycle and harassment debt brings as well as save their primary homes from being foreclosed upon. Homes are being foreclosed because homeowners are having more trouble making payments regularly due to job loss or simply having too many debts. When a mortgage note is late or missed too often, the creditor may consider the loan in default and start foreclosure proceedings.... 

What Are The Types of Bankruptcy?

For many, bankruptcy is the last option for eliminating overwhelming debt. Because bankruptcy leaves a long lasting (10 years) mark on credit histories and scores, it is only advisable to go into it knowing all of the details and the consequences. It is recommended that you speak to an attorney before going forward with a bankruptcy filing. Understand that bankruptcy will limit your abilities to borrow money or get credit in the future. It should be considered a last resort to debt elimination and...