Is Bankruptcy Right for you?

Bankruptcy is a financial practice that allows you to officially declare that
you cannot repay your debts now and do not see how it will ever be possible in
the future. Declaring Bankruptcy is a big step. For some people, there are
other ways to get out of debt, like debt consolidation or negotiating with your
lenders. However, if your best option for getting out of debt is bankruptcy,
than you should take steps to make this financial situation work in the best
possible way for you. A financial profession can help you do that. In any case,
before you jump into anything, you need to fully decide if bankruptcy is right
for you.

First, it is important to learn as much as you can about bankruptcy. For
individuals, chapter 7 and chapter 13 are the two types of bankruptcy that can
be filed. There are other options for businesses and entities. Learn the
difference between the two so you can see how they work. If bankruptcy is right
for you, you must be aware of your obligations and your lenders' choices.

Once you have learned all you can about bankruptcy, take a moment to consider
other options. For example, you can consolidate your debts into one large
monthly payment. If you are considering bankruptcy because you just barely miss
paying off your bills on time every month or if you feel overwhelmed by credit
card debt, this may be a great option for you. You can also try doing nothing
and living simply for a number of years, which works well if you have no family
for which you are responsible. Another options is negotiating with your lenders.
In the end, there are many different options other than bankruptcy, so make sure
that your second step is to consider them all.

Next, check out the requirements for eligibility for declaring bankruptcy. If
your debts are too high and your income too low, you probably will not qualify
for chapter 13 bankruptcy. On the other hand, if your income is too high and
your debts too low, you probably will not qualify for chapter 7 bankruptcy. In
some cases, you may not qualify for either, and this is a sign that you did not
think through your other choices.

Consider all of your property and debts if you do qualify. What will happen to
your home? Your car? Your retirement plan? Every state has different
specification when to comes to this, so make sure that you understand how your
property will or will not be taken. Also, it is important to begin compiling
lists of your assets and debts. Remember that some debts cannot be wiped out,
like child support payments.

Once you have all your information compiled, you can begin the declaration
process. It is best to work with a lawyer or financial professional to complete
this task, and remember to always be completely honest. Declaring bankruptcy is
not for everyone, but it can work for some people.

The Chapter 7 Bankruptcy Timeline

Bankruptcy is when you legally declare that you can no longer repay your debts.
Individuals have the choice of either declaring chapter 7 or chapter 13
bankruptcies, depending on the severities of their debts and the incomes being
made. Of most, chapter 7 bankruptcy makes the most sense, although you should
consider both carefully and do what is right for your. However, if you do
declare chapter 7 bankruptcy, here is how it will play out:

First, your declaration officially begins when you sign the paperwork and file
the proper documents with a bankruptcy court. In most states, you have to
finish a counseling course regarding bankruptcy so that you can be sure this is
the correct option for you. This can be done no longer than six months before
file your paperwork. Upon filing, your wages will no longer be garnished and
your creditors can no longer proceed with legal actions against you or, in most
cases, even call you regarding your debt. The court will contact your creditors.

Next, you must meet with your creditors in what is called the 341 meeting.
Creditors may or may not choose to attend, but you must be there. A trustee
will be assigned to your case and presides. This meeting will typically only
last five minutes, and creditors usually do not show up. Afterwards, your
trustee will sell any of your possessions that are nonexempt. Creditors have up
to 90 days to then file claims. A bankruptcy lawyer will be assigned to help you
through this process.

After the 90 days are over, or after all of your creditor have files their
claims (whichever comes first), you will be discharged and all of your debts
will be written off, except certain exceptions, like student loans and child
support payments. Other debts that cannot be wiped clean from your slate
include alimony obligations and taxes.

Be aware that most of your possessions can be sold when you file for bankruptcy
and will be sold rather quickly. In many cases, it is better to sell them
yourself for more money before you declare bankruptcy and use them to help pay
off debts. If you can do this effectively, you might not have to declare
bankruptcy at all. If you can, look for options to avoid bankruptcy. You have
choices, and debt counselors can help you figure out a financial plan that is
right for you.

Bankruptcy Counseling

Now, with the new laws that were passed in 2005, you will need to take some
pre-bankruptcy debt counseling in order to be able to file a chapter 7. It has
become law that you get counseling before and after filing bankruptcy.

The debtor must get counseling and certification from a non-profit
credit-counseling agency before the forms can be filed for your bankruptcy.

You'll need to take one or two sessions in order for you to find certification.
With the certification you will be able to proceed with the bankruptcy filing.

There is work you need to do even before you get your pre-filing credit
counseling certification. There are forms you will need to have filled out
during your sessions.

The first is the income certification form. It will state your income and also
it will show a fee schedule. Also, keep in mind that the budget form will also
need to be filled out, but that form is very self-explanatory and easy to
understand.

With these forms complete, and your certification now complete, you will need
the non-profit credit counselor to fill out your affidavit and agreement for
credit counseling. Your attorney will notarize the form, but you'll also need
to send it along with a coy of your state ID.

All of these forms must be presented to the court clerk before you begin to
file your bankruptcy paperwork along with a notable fee.

You may be able to get this service online and even on the phone. Many
companies will offer their service in the office, but they also are very
flexible with the sessions. Once you have completed these steps, you are ready
to file the paperwork with your bankruptcy court.

You will need to be prepared and understand what it is that you need to expect
certain things to happen during the court process. You will want to keep in
mind that another counseling session is a must in order for you to plan better
for the future. You will want to keep in mind that the finical planning session
will help you to get back on your feet and also plan better for your future.

How filing affects credit score

Often people consider using a bankruptcy because they have many questions
regarding the future and also they wonder if it could be the best way out. You
need to make sure that you realize that the bankruptcy will stay on your credit
report for years. You will still be able to achieve credit, but it will affect
your credit number.

One of the most common questions about bankruptcy is about your current credit
cards and also your credit for buying a home or another big purchase.

If money is owed on a current credit card, then it must be listed in your
bankruptcy forms as a debt. These forms are filed under penalty of perjury and
if fraud is detected, your bankruptcy case can be discharged.

Something that you will need to consider is that perjury is a federal crime.
You may end up fined or in prison if you falsify any of the documents that you
clean in your bankruptcy case. As for your cards, you'll find that if you don't
owe the company anything, then you don't have to list it and you can keep it.

But this doesn't necessarily mean you will get to keep your card. Your company
may cancel your account as a precautionary measure.

Also, you'll need to keep in mind that credit is available to other who files a
recent bankruptcy, but the thing is you will end up paying more in interest
rates.

But it is not necessarily a good idea to start up right away with those credit
cards. Usually it is what gets people into trouble in the first place. It is
also important to avoid credit repair scams.

The fact that you will not be able to get a loan for a home in the next ten
years after filing bankruptcy is false. Usually after two years you should be
able to qualify for a loan. It will stay on your credit report for quite some
time, but often, it is taken into consideration and you are given a loan on
good faith.

How to aviod Bankruptcy

Keep in mind that when it comes to bankruptcy you will want to look for other
solutions, because you need to find someway of getting your individual and
business financial obligations.

If the right steps are taken from the beginning, you can keep yourself and your
family out of financial trouble and away from bankruptcy.

You will need to start off by educating your children. Many of us growing up
weren't presented with the tools and knowledge to establish and maintain good
credit and keep away from the scare of bankruptcy.

You should be honest to your children about your finances, but also need to be
able to guide your children to make the right decisions in the future. Teaching
children that hard work, no matter the job, has its rewards and if you spend on
a budget, there will never be a fear of bankruptcy.

You'll also need to establish a budget in order to keep bankruptcy from
happening. You cannot spend what you don't have. Many people today have
multiple credit cards and are in essence spending money they don't actually
have, plus more for interest.

You also don't want to pay off the credit cards with another credit card. This
is just an awful chain reaction that will not get you anywhere. You'll need to
spend what you can afford and only what you can afford.

But you will want to make sure you have something socked away for an emergency.
You will find that that it is a good idea to have at least two thousand dollars
set aside for just in case purposes.

It is another step to take to keep out of financial trouble. Probably the most
important thing though is to watch your bank account. Don't allow yourself to
be in a situation where you overdraw.

Keep in mind that there are so many people who rely on the overdraft in order
to keep them financed each month, but you will find that your actions are
destructive to your credit report but they are also The fact is more than a
third of adults rely on their banks overdraft to keep them going on a
month-to-month basis. Such actions are ones that lead individuals on a path to
bankruptcy.

The Main types of Bankruptcy

Bankruptcy is a way for you to get out of your hard financial times and it is
something that you have to do when you can no longer afford to pay your
existing debts.

Keep in mind that there are many types of bankruptcy, but the most commonly
filed form of bankruptcy is chapter 7 and a chapter 13.

Chapter 7 is the most common for the individual. It is the complete erasing of
qualifying debt. The debtor is then released from all repayment obligations.
Keep in mind that chapter 7 bankruptcies are very serious and should not
something that is taken lightly.

While giving you an immediate fresh start in repairing your finances, it
remains on your credit report for 10 years. You still will be seen as a high
risk and you will also be noted as a person who is financially irresponsible.

Chapter 13 is less harmful to your credit. Though there are still marks against
you, since you will be working to repay your debts on a payment plan, you do not
look like you are financially irresponsible, though you are still considered a
slight credit risk. With a chapter 13 you will be able to keep your home and
they will not start selling your assets to pay back your creditors like you
would in chapter 7.

In 2005 an act passed legislation that now makes it more difficult for
individuals to receive a chapter 7 bankruptcies. You know need to do pre-filing
credit counseling sessions and also post-filing financial counseling, so that
you can get yourself back on the right track.

It is very important that you weigh all sides of the chapter 7 and the chapter
13 bankruptcies. You need to decide which one will do you more harm then good.
You'll also want to make sure that you pick a bankruptcy that will help you to
resolve some of your financial problems.

Tips on filing for Bankruptcy

Not a lot of people want to make the decision of when to file bankruptcy, but
you'll also find that there is some point where it just may have to be done.
You'll wan to keep in mind that bankruptcy will affect your credit rating and
you'll also have other ramifications.

Filing bankruptcy should only be a last resort when all other options have
failed you. But when should you consider filing for bankruptcy?

You may also want to file bankruptcy when you are constantly borrowing money
from one credit source to pay another credit source. If you need to start
taking cash advances of more than $500 just to pay for living expenses.

You borrow to meet regular expenses like food and utility bills. You have
stopped answering your phone because the only calls you receive now are from
creditors.

Are there creditors that are threatening to sue you? They have even already
taken some legal action against you. You will find that these all are signs
that there is something terribly wrong and these are signs that you may want to
consider filing a bankruptcy.

Then it comes to the decision of what sort of bankruptcy you need to file for.
The most common are chapter 7 and chapter 13. With a chapter 7, you will find
that it will wipe all your debt clean and it will also give you that immediate
fresh start. Chapter 13, you will be making payments for three to five years.

However, you need to make sure that you consider filing for bankruptcy when you
have gone through all of your other options. You'll need to make sure that you
think about your financials as practical situations. You will also find that if
you get some professional advice from a bankruptcy lawyer they will tell you
what your options are and also get the bankruptcy filing going if that is your
last option.

Bankruptcy: A Matter of Pride

Bankruptcy is a financial technique in which you declare that you cannot repay
your creditors now or see a way to repay them in the future. Depending on your
income and the amount of money you owe, an individual may declare chapter 7 or
chapter 13 bankruptcies. However, in either case, bankruptcy is a fairly public
affair. Your name and address will be published in at least one of the local
newspapers for all of your friends to read, and your neighbors will see movers
coming to repossess some of your items. For many people, the worst part of
bankruptcy isn't losing the money; it's losing pride and dignity.

The first way to deal with this is to realize that most of your friends and
family have gone through money problems at one time or another in their lives.
Although they may not have resorted to bankruptcy, there is certainly no
question that only the very lucky do not feel drown by debts at one point or
another. Simply put, people will understand. Even though you may feel like
everyone is snickering at you behind your back, the truth is that most people
are actually empathizing with you.

Also realize that not everybody will realize you've declared bankruptcy. Most
people do not take the time to read the newspaper that carefully, and even
though word does travel fast, it is not a topic that most people will bring up
because it simply is not that interesting. You might feel like you're the
headlining news, but in actuality, most people probably didn't even know about
it.

It is important to continue with the process, even if people do find out. If
you are embarrassed, simply understand that so our all of people in this
country who are going through the same thing. You are not alone. In fact, you
may be able to get counseling to help you go through the bankruptcy process.
You may be surprised at how many people have declared bankruptcy and gone on to
be very successful.

If bankruptcy is the best thing for your family and your financial situation,
it is most important that you continue with the declaration. Take care of
yourself first, then worry about what other people have to think. The most
important thing is not what your neighbors have to say, but instead what you
are doing to get yourself bank on track financially so that your future will be
brighter.

Bankruptcy and Divorce

If you believe that you and your partner are headed for divorce, and you both
have a lot of debt between you, it might be a good idea to decide to file for
bankruptcy before you begin to file for divorce. This will pave the way for the
divorce to proceed much more easily because it will allow you to get rid of some
of your debt and to clear the way for a clean break. If you can file for
bankruptcy, then you can have a better idea of how to deal with the debts that
do remain between the two of you. It will also mean that if your ex files for
bankruptcy later on down the road, you can be protected because you are going
to take care of your debts before the divorce.

The way it works is rather simple. When one or both of the spouses file for
bankruptcy, all of the property that has been shared by both of them will
become a part of the estate and will then be available to pay for the debts.
This will also mean that you have been granted an automatic stay, which means
that the creditors can't hound you for money. Remember that this stay does not
prevent you from getting spouse or child support from your ex. The next thing
that will happen is that the bankruptcy court will decide what shared property
is exempt from the bankruptcy, meaning that it cannot be sold in order to pay
for your debts. Then, the divorce court can divide that property between you
and your ex spouse.

If you are trying to negotiate property settlements, and also going through
bankruptcy, you are going to be dealing with very complicated issues. Some of
the debts that might be related to a property settlement might not be wiped out
during the bankruptcy, so you will still need to pay them. However, these debts
can be wiped out if you can show that you can't pay the debt and still take
care or yourself or your children, or that if you wipe out the debt it is going
to be better for you than the harm that would be done to the people that you owe
by not paying it. This means that if you think your spouse is going to consider
filing for bankruptcy after the divorce is final, you need to make sure that
your finances are squared away so that you aren't going to be faced with any
more debts.

Bankruptcy and Taxes

When it comes to bankruptcy and taxes, there can be several serious things that
you are going to want to think about. If you are going to file for bankruptcy,
you are going to want to make sure that you are doing everything you can to
save yourself as much trouble, money, and time as you can.

You should know that any income tax debts might be eligible for being taken
care of under Chapter 7 or chapter 13. If you are willing to file for
bankruptcy, this is one of five ways that you can get out of tax debt. However,
you should remember that in order to get your taxes discharged by filing for
bankruptcy, you are going to have to meet certain requirements, so you should
make sure you meet them before you file for bankruptcy to get out of tax debt.

If you file for Chapter 7, you are going to be able to get fully discharged of
the debts that are allowable. With Chapter 13, there will be a payment plan
that is required so that you can pay back some of your debts, and the rest will
be discharged. Remember that not all of the tax debt that you might have is
going to be discharged if you file for bankruptcy. You have to meet five
criteria in order to get your taxes taken care of.

These five criteria that you need to meet in order to get your tax debt
discharged when you file for bankruptcy are all important. The first is that
the date that the tax return was due was at least three years ago. The second
is that the tax return had been filed at least two years ago. The third is that
the tax assessment is at least 240 days old. The fourth is that the tax return
cannot have been fraudulent. And the fifth is that you are not guild of tax
evasion. If you can meet all of these criteria, you are going to be able to
most likely get your tax debt discharged when you file for bankruptcy.

Remember that filing for bankruptcy carries its own consequences, especially on
your credit. You should not file for bankruptcy just to be able to get out of
paying your tax debt, because it is going to do much more harm than good in the
long run when it comes to the damage done to your credit. Only file if you have
no other option and if you've been told that it is your best chance of
beginning to rebuild your life.

Bankruptcy fraud

Even though a bankruptcy can sit on your record or on your companies record for
a very long time, and even though it can make it nearly impossible for you to
get loans, get credit or even do any large financial trading, there is still
the factor that remains that once you have filed for bankruptcy, your debts are
most likely going to be taken care of. This had led to many advancements in
bankruptcy fraud, and has led in turn to a crackdown on this fraud by the
government, which is going to hopefully be able to take care of too many
different bankruptcies and get more and more people back on their feet in the
correct manner.

Bankruptcy fraud can be done in several ways, and some of them are quite hard
to catch. One thing that is done is when someone files for bankruptcy but
really doesn't need to file for it. They might hide most of their assets by
giving them to others to own or hold, and by not disclosing them. This means
that the assets that they do have are taken and sold, and their debts are
forgiven, and once the bankruptcy act is closed, these people simply get their
property back from wherever they had it, and they are in much better shape than
they were before, even with the mark on their credit. If you have enough
property and you hide it from the government, then even though your credit says
you have filed for bankruptcy, you can still find ways to pay for things because
you still have the assets.

Bankruptcy fraud is dangerous because it is hurtful to the people who file
bankruptcy when they actually have to. Those that are filing in fraudulent
manners are tying up the court system and are tying up the resources that the
other people need in order to actually get their debts taken care of. This is
detrimental to the whole process. It also isn't fair to the creditors because
if someone files bankruptcy and hides their property, the creditors are not
going to get everything that has been owed to them and are going to find
themselves out of luck. Because of the fact that bankruptcy fraud can be
harmful to so many different people, the government has cracked down on it and
now makes sure that being caught with bankruptcy fraud is something that is
very punishable. It is also not easy to get away with in any way.

Chapter 11

When you file for bankruptcy, there are several types that you might want to
file for. Each different type if made for different situations. Chapter 11 is a
bankruptcy that happens when a business is unable to pay its creditors or take
care of its debts. This is a federal bankruptcy that is filed with a federal
court. A chapter 11 bankruptcy means that the business plans on trying to
continue to be in business while it is filing. It means that the business is
not going to go out of business, but that it is going to allow the court to
reorganize its finances, including its debts and its contractual obligations.

With Chapter 11, a court can grand either a complete or a partial relief from
most of the debts and obligations that the company has. This is done so that
the company can begin again and can have a fresh start. What happens is fairly
simple. The court will take the assets that the company has and divide them in
order to payback its debts or its obligations. If the debts are greater than
the assets, then the owners and stockholders of the business are going to end
up with nothing. This means that their rights and interests in the company will
be completely terminated. Then, the company is actually going to belong to the
creditors, as a way of paying them back. This is the only way that the
creditors can hope to get all of the money back that is owed to them, if the
assets of the company are not enough to pay them back. It is done in hopes that
the company will succeed in the future, and that the creditors will be able to
make a profit off of it.

Basically filing for Chapter 11 means that you hope to keep the company in
business. You hope that you are going to be able to find a way in the courts to
sell off all of the company's assets to pay back the creditors, and you hope
that by doing so you are still going to be left with the company in the end.
However, there is a risk that you are taking because if you can't find enough
assets to pay off your creditors, you are going to end up losing your company
to them. The good news about this is that you are no longer going to be
personally responsible for paying back your creditors. The bad news is that
they are going to have your business and you are going to have to start from
scratch in order to make your own living.

Chapter 15

There are several different types of bankruptcies, and Chapter 15 is only one
of them. This is the function of bankruptcy when it comes to different
countries. The reason that the United States added this part to the Bankruptcy
Code is that a lot of the time what happens in one country regarding bankruptcy
is often tied to either assets or information that can be found in other
countries. When there are many different countries, and therefore multiple
jurisdictions involved, things can get confusing. Chapter 15 can help to
straighten these things out in such as way so that everyone know where the
money is and where it should go.

Chapter 15 basically allows the US government and the bankruptcy courts to be
able to get information about a company's assets or a country's assets. This is
a good option for companies that try to keep some of their assets in another
country so that they will be better able to file for bankruptcy. What this does
is that it makes the proceedings for bankruptcy go much smoother and take up
much less time and money than if there was no such thing as Chapter 15 to
protect the assets of a company in general.

Chapter 15 sets up cooperation between the United States Courts and the foreign
courts and representatives so that they can all take care of the interest of the
person filing for bankruptcy together without having to deal with all of the red
tape that goes along with filing for bankruptcy when several of the assets are
located somewhere overseas.

It is a matter of discretion when it comes to whether or not the US courts will
extend the assistance needed to the countries or companies in question. Most of
the time, the US courts will have to take into consideration how the different
jurisdictions relate to the matter at hand and what kind of action should be
taken to get the bankruptcy done with as little trouble and drama as possible.

Remember that this is something that has been set up so that in general the
process of gaining a bankruptcy and getting to take care of the assets that are
overseas are easier to take care of. Most of the time this can be used in
conjunction with the other filings of bankruptcy, because it is something that
can be very useful to many of the individuals or companies that file for
bankruptcy.

Corporate Bankruptcy: Where Does it Leave You?

Corporations can file for bankruptcy, just like individuals. Bankruptcy is the
legal declaration that you cannot pay your debts. However, the problem arises
when the corporation is a large public company that has given out thousands of
shares of stock to different stockholders. If you are one of these
stockholders, you may be wondering how this company's bankruptcy will affect
you.

Don't worry�when you are a stockholder, although you own a tiny piece of the
company, you personally are not financially responsible for the company
declaring bankruptcy. You may lose a lot of money because the value of the
stock might drop to zero, but creditors won't be banging you're your door
asking for millions, that's for sure! However, as a stockholder, you are
responsible to continue to understand how the company is operating throughout
the bankruptcy. You do have a small say and how it operates.

Companies can choose to file either chapter 11 or chapter 7 bankruptcy. Most
choose to file chapter 11. This means that, although the company cannot
currently pay off its debts, it is hoping that with some help and with
reorganization the company can be profitable again. The company's stock can
continue to trade while this is occurring. Sometimes a trustee and creditors
will handle the reorganization, and sometime the new owners will handle it. It
depends on the specific situation.

In this case, when the reorganization plan is complete, you as a stockholder
will get a vote. You should read everything sent carefully, and if you agree
vote in favor. If you do not agree, vote against. Your voice does make a
difference, because if enough people vote against, the company cannot carry
through with the plan.

However, in some cases, this is not how companies choose to proceed. If the
company is deeply in debt and does not see any chance for coming back from this
debt, even after a reorganization, the company will declare a chapter 7
bankruptcy and liquidate. When a company liquidates, the trustee sells all of
the assets to pay off creditors. For, secured debts are repaid, and then
unsecured debts are repaid. If there's any money left, it is split amount he
stockholders, but this is usually not the case.

The bottom line is that bankruptcy is bad for everyone. It is important to
follow the things happening in your company so that you are aware of things
like this that could be on the horizon. The stock market is a gamble, and
sometimes it does not pay off.

Debt Consolidation: An Alternative to Bankruptcy

Bankruptcy is when a person or business officially declares the inability to
pay back creditors the money that was previously borrowed. This should only be
done as a last resort, because bankruptcy will affect every aspect of your
life. It will also affect your ability to get loans, mortgages, and credit card
in the future. However, for some people, declaring bankruptcy means finding
freedom once again. It wipes your slate clean so to speak, and you can start
over again with your credit.

However, there are a number of things you should try before you declare
bankruptcy. One of these things is debt consolidation. Deb consolidation cannot
help everybody concerned with money problems, but for some, it is jus the boost
needed to keep them from declaring bankruptcy.

Debt consolidation is basically taking all of your loans and paying them off
using one large loan. You then have one monthly bill to pay instead of a number
of smaller bills. This can save you money in the long run. Why? The one large
loan will usually have a secured lower fixed interest rate. This is especially
advisable if you are considering declaring bankruptcy because of high credit
card debts.

Credit cards have very high interest rates�usually much higher than any other
kind of loan. If you miss just one month of paying your card in full, you may
never get back on track for paying off the balance. This can really start to
add up if you find that you have more than one card. If you are far into debt,
you can probably not get an unsecured loan from a financial institution, like a
bank. However, you should be able to get a secured loan. A secured loan uses
your house, car, or other possessions as collateral. With a lower interest
rate, you can start making headway into your debt instead of simply making the
minimum monthly payments. This will help you to avoid bankruptcy.

Consolidating your debts may not be the best choice for everyone. In fact, in
some cases, bankruptcy is really the best way to get back on the financial fast
track. However, it is important to realize that you have choices. If you don't
have to declare bankruptcy, avoid it and you will find that your life will be
financially easier to handle in the future. It depends on your unique
situation. Talk to a financial professional if you want more help learning
about debt consolidation.

Doing Nothing and Avoiding Bankruptcy

Bankruptcy is the official declaration that you cannot repay your debts. This
is used only as a last resort, when you have found no other way to get out of
debt. For most people, this is not a good option. Bankruptcy can only be
successful if you really have tried every other option and none of these
options have worked. For some, bankruptcy might be the answer, but there are
many options you should try first. One of these options is actually doing
nothing.

Unlike most people think, you cannot simply be thrown in jail for not paying
your debts. This only happens in extreme cases, like if you refuse to pay your
taxes or don't pay child support. As long as you pay these debts, there is not
much a creditor can do to you. The key is, however, that you must live simply
with only the basic needs until your debts are no longer collectable.

For example, a creditor can sue you for the debt you owe and take you to court.
However, even if that debtor wins in court, which is most likely, he or she
cannot take away your basic needs. Basic needs that cannot be taken include
clothing, food, ordinary household items, like your bed and blankets (as long
as they are not excessively ornate or valuable), and checks you receive for
social security, public assistance, or unemployment. If you have nothing else,
the creditor has nothing to take.

Be forewarned that you will not be able to save any money during this time
period, nor will you be able to live with anything other than the basic human
needs. If you start earning an income, anything you do not use for food and
other basic human needs can be taken away. A court will decide how much your
wages will be taxed.

After a number of years, the debt becomes uncollectable. The basic plan behind
doing nothing is that you will live simply until this time arrives. It will
probably be different for every debt you have, depending on what kinds of debts
they are. However, after that time period, you can again start saving money,
living more extravagantly, and even applying for new loans. Of course, you
probably will not quality, but after seven years, all past debts are wiped
clean from your credit history.

This method takes time and is not for everyone, but if you don't want to
declare bankruptcy, it is an option you have. Talk to a financial professional
if you want to figure out the best course of action for you and your lifestyle.

Filing Chapter 7

If you are going to be filing for bankruptcy, you might be, or be forced to be,
filing under Chapter 7. If you are a business, this means that the business is
going to be ceasing operations and having a Chapter 7 Trustee appointed right
away, who will sell all of the assets and distribute the money to the
creditors. It might or might not mean that the people who work for you will
lose their jobs. Sometimes, when a company is sold off, it is kept intact or
partially intact, and business might proceed as usual, simply with a different
person in charge.

Chapter 7 can also be filed by an individual. This is going to mean that you
can keep certain property that is exempt. However, some liens, such as real
estate mortgages, are going to be kept intact. Any assets that are not exempt
are going to be sold off by the trustee in order to pay back the creditors.
This is going to mean that the other types of unsecured debts that you have
will be canceled. Even though most other types of unsecured debt are canceled,
there are some that you are still going to have to be responsible for. This
includes child support, most taxes, most student loans and any fines or
restitutions that you are responsible for regarding any crime you might have
committed.

If you file for bankruptcy, you are going to be able to start again because
most of your debts will have been canceled. Of course, anything that you have
of any value will have been sold, so you are going to have to start over when
it comes to that as well. Another disadvantage is that you are going to have a
record of the bankruptcy on your credit report for 10 years. It might mean that
you aren't able to get loans or other types of credit, but this effect could
happen just as easily with high debts.

There are some things that you should consider before filing for Chapter 7.
There are some cases in which you can avoid being forced to file on the grounds
that it is abusive. You might be able to opt for Chapter 13 instead, which means
you can pay off all or some of your debts if you have more time, and if this
happens you won't have to have your property and assets sold off.

Filing Chapter 9

When you are going to be filing bankruptcy, there are several different types
from which you can choose. One of the kinds of bankruptcy is called Chapter 9,
and this is municipal bankruptcy.

This began in 1934 during the great depression. This was enacted so that
municipalities could file for bankruptcy in the same way that individuals and
businesses could. The purpose of filing for Chapter 9 bankruptcy is that it
will provide a municipality that is financial distressed with protection from
the creditors, and allow it to develop further and figure out a way to clear
its debts. In the same way that other bankruptcies work, when a municipality
has filed for Chapter 9, their assets will be reorganized in order to pay back
as much of their debt as possible. With this type, this means that either the
old debts will be extended in the interest of the debt maturities and that the
creditors will still get their money, just at a later time. Sometimes, it also
means that the interest or principal on the debts can be reduced. Other times,
it means that the debt can be refinanced by getting a new loan that will cover
all of the old ones.

The thing that is different about Chapter 9 is that there will be nothing in
the bankruptcy filings that say that the assets of the municipality have to be
sold or liquidated in order to pay off the debts. This makes it very easy for a
municipality to file for bankruptcy and figure out a way to get out of debt
without having the legal issues regarding differences between states and their
internal affairs that should not be regulated by the government.

A person or a business cannot file for Chapter 9. Only a municipality can,
which is defined under the code as �a political subdivision or public agents or
part of a state.� This includes cities, counties, school districts, towns, and
even public improvement districts. Also included under this definition would be
bodies that produce revenue, such as bridge authorities, or authorities that
deal with highways or gas. When filing for Chapter 9 it is very important that
you fit this definition because the specifics of Chapter 9 are meant only to
provide this surface to a municipality, and not to just an individual or a
business who is going through bankruptcy. It is designed to keep the country
running as well as possible.

Filing Chapter 12

When you are talking about bankruptcy in general, you are going to find that
there are many ways to file for bankruptcy. In general, when you file for
bankruptcy you are saying that you no longer have enough money to pay back your
debts or to pay your creditors. If this is the case, you are filing for
bankruptcy. The good news for you is that filing for bankruptcy is going to
give you a fresh start. The courts will decide how your creditors are to be
paid off, and you will no longer be in debt. The bad news is that it is going
to reflect poorly on your credit for a long time. However, you will be able to
begin to make money on your own that doesn't have to go towards paying your
debt, and this is good news because you are going to find you can start over
again.

However, there are different practices when it comes to filing for bankruptcy,
and there are different ways to file. These different ways are named after the
different chapters in the Bankruptcy Cod of the United States Code. Chapter 12
is a piece of the code that is only available to family farmers and to
fishermen who have gone through certain situations and end up with no money to
pay back their creditors.

The Chapter 12 of Title 11 states that the bankruptcy filings of family farmers
and fishermen are to be handled in a slightly different way than ordinary US
earners. Chapter 12 has always been under fire, and was set to expire in 2004,
before it was renewed and made permanent. It is similar to chapter 13, except
for that it benefits the farmers and the fishermen.

The reason that family farmers and fishermen need a separate code to file
bankruptcy under is quite simple. While most wage earners have jobs and
businesses, many times the success or failure of farmers and fishermen can be
completely out of their hands. Weather and natural disasters play a big part in
whether or not a farmer or fisherman succeeds. Therefore, when a farmer or a
fisherman is going to file for bankruptcy, these things need to be taken into
consideration because there are going to be different allowances made for
situations that are not under the control of the person who is filing for
bankruptcy. It is all designed with the best interest of the parties involved
in mind.

How to get a Mortgage After Bankruptcy

Declaring bankruptcy can be a great tool if you find yourself drowning in debt.
Bankruptcy is meant to help people who just cannot find another way out. It
allows you to use all of your assets to pay back as much as possible over a set
number of years are all at once and then start anew. When you declare
bankruptcy, you free yourself from creditor and collection agency phone calls
and have the chance to start over again with a fresh slate.

Well, almost. When you declare bankruptcy, it appears on your credit history
that you took this action. Bankruptcy means that your lenders probably did not
get back all of the money you owed them. Therefore, if future lenders see that
you have declared bankruptcy in the past, you are considered to be a very
high-risk candidate, because you might not have changed. Getting a mortgage
after bankruptcy can be especially difficult, but there are ways to go about
doing it.

First, building up credit�good or bad�takes time. If you declare bankruptcy,
you effectively wipe out your credit history. However, that includes any good
credit you may have had as well. Therefore, you have to start from scratch.
Just like a mortgage lender would consider a young adult a high-risk candidate
because he or she has little credit history, you too will be considered a
high-risk candidate. You can explain to your lender about how you're going to
change until you are blue in your face, but a more effective way to do that is
to prove it. Build up your good credit again, and wait about two years before
even considering approaching a lender regarding a mortgage.

You can also use special government programs to help you get a mortgage. Some
will work with you to put less money down on your new home and to convince a
lender that you should qualify, even if you have declared bankruptcy in the
past. If you have a solid income now and are working to pay off debts, you can
probably qualify for some of these government programs.

You can also use your current home as equity to convince a lender that you
should qualify. The less money your want to borrow, the less risk you are to a
lender. Therefore, if you can pay for the majority of your new home by selling
your current home, your lender will be more likely to overlook the fact that
you've declared bankruptcy in the past.

The real lesson here is that bankruptcy should not be declared lightly. You
need to make absolutely sure it is the best option for you. Bankruptcy should
be your last resort financially, because it will make it difficult to do things
like get a mortgage in the future.

InfoBank Intro | Main Page | Usenet Forums | Search The RockSite/The Web