Showing posts with label what is bankruptcy. Show all posts
Showing posts with label what is bankruptcy. Show all posts

Tuesday, August 6, 2013

Is there a difference between Chapter 7 and Chapter 13 Bankruptcy?

Declaring bankruptcy is an upsetting time for anyone. You never want to be placed in this position. In the US, there are two major types of bankruptcy you might file for if your personal debts have grown out of control: chapter 7 and chapter 13 bankruptcy. A lot of people confuse these two types, and when you are facing serious financial debt, it can be very difficult to know which route to take.

Here are the major differences between chapter 7 and chapter 13 bankruptcies, so you’re aware of your options if you face insurmountable debt.

Chapter 7 Bankruptcy Explained


Chapter 7 bankruptcy is where you admit to the court you have no chance of paying off your debts, and the court discharges your debts. You’ll be completely free from debt, but the catch is your belongings and property can be distributed to creditors to pay off your debts. There are items exempt from this, but in extreme situations where you owe large amounts of money, you could lose everything.

This is the end of the line for most people. The bankruptcy mark will remain on your record for a number of years, making it almost nearly impossible to take out credit.

Chapter 13 Bankruptcy Explained


Chapter 13 bankruptcy isn’t bankruptcy in the conventional sense. While you agree you can’t pay off your debts, you don’t necessarily discharge the debts. Instead, you broker a deal in the courts between you and your creditors where you’ll create a repayment plan. Usually, you’ll have your wages garnished every month until the debt is repaid. The difference is you aren’t putting your belongings at risk unless you specify that in the terms of repayment. In some cases, you might have some of your debt discharged.

Like chapter 7 bankruptcy, the mark of a chapter 13 bankruptcy remains on your credit score for several years, making it difficult to take out new lines of credit.

What Can They Take?


In chapter 13 bankruptcy they can’t take a thing. This isn’t where you admit you have to make a fresh start. It’s simply admitting you need legal intervention to help you pay off your debts. You can agree to sell something, like a car or furniture, to make the deal better for yourself, but it isn’t always necessary.

In the case of a chapter 7 bankruptcy, they can take anything of sufficient value. A bank could seize property, but in many states your primary residence is protected. Despite the equity, it’s likely the bankruptcy could still force a sale of your home so the creditors can recover their money.

You can lose your vehicle unless the court deems it essential to your livelihood. You can also keep trade tools for your work, but this only applies to a certain value. Anything above this value can be sold.

Your furniture and personal belongings are normally exempt from being sold off to collect a debt. Expensive jewelry and large items like plasma televisions and high-tech computers can be sold if they’re worth enough.

If you’re filing for either type of bankruptcy, it’s strongly recommended you employ a bankruptcy lawyer to help with the process. Through professional legal guidance, you can get you a more favorable deal and potentially help you retain many of your possessions.

About the Author:
Ashley Parker has worked with many bankruptcy lawyers and financial advisors over the years. She regularly educates people on the differences between chapter 7 and 13 bankruptcies. As one of many chapter 7 attorneys, she recommends her clients try to opt for chapter 13, if at all possible.


Tuesday, July 16, 2013

Factors to Consider While Filing Bankruptcy

English: Part of Title 11 of the United States...
Bankruptcy is one word that we all fear about. Debt is stressful and overwhelming experience for anyone and a pure hell that have gone through. The most hazardous is when these debts start piling up and collection begins to call in; it is like living on the edge of financial hardships. Rather than keeping your debts and overhead expenses piling and finally that you come broke, it is better to file a bankruptcy before that.

In present economic situation, filing a bankruptcy is common thing, though for those who are filing are under pressure of numerous things, questioning whether they have head towards the right step or not.

Also, they have a fear whether they will be able to get back their life on track or not. There are certain factors to consider while filing bankruptcy and instead filing it yourself it is recommended that you hire an expertise help.

The reason of hiring an attorney for filing bankruptcy is every country/state has different norms to follow and has designed the bankruptcy law similar to that. It is difficult to know and follow these laws, also with time they are changed which makes grim to know the latest update thus, employing attorney sounds good.

Below mentioned are some of the factors to consider while filing bankruptcy such as:


First Thing First, Are You Ready For This: It is an important decision that people take time in taking into consideration. Determining to file for the bankruptcy doesn’t mean one doesn’t have weighed its pros and cons. Also, it is life altering matter, if not bankruptcy, through debt negotiation has also proved to be effective in resolving debt issues.

Your Assets Might Be At Risk: Debt crisis can lead to all types of consequences; some of them make it worse than others. When you default on a secured debt, such as car loan or mortgage those assets automatically turns into the risk of liquidation. Filing for the bankruptcy can help you regain the possession of your assets or can prevent a foreclosure. This is an actual benefit that people find appealing in bankruptcy process. When comparing the traditional debt negotiation, bankruptcy places an instant hold on any seizure, garnishment orders or lawsuits. This lets you have enough time to resolve your debts without worrying about your valuable possessions.

Debts Are Overwhelming: People most of the times misunderstood about the entire filing bankruptcy procedure, they think that those who file bankruptcy are overwhelmed by their debts. However, it is not always the same scenario with missed payments and tight financial condition it is an occasional concern and doesn’t necessarily suggest that you are a candidate for filing bankruptcy. If your debts majorly comprises of student loans, domestic expenses, taxes and such like then you are less likely to file bankruptcy since these kinds of debts rarely qualify.

Have You Reviewed Your Options? Filing for the bankruptcy could be a great tool during your financial hardships, not a first choice that you at the most consider. Though the entire procedure is time consuming, and involves attention from legal avenues. Also, know that not every time you are saved from the legalities there are always good as well as bad side and depending on the case the court approves the filing if not entirely but partial. It is better that you consult an attorney and let him/her do the job.

It is necessary that you talk openly with your attorney, as he/she would be the only person that would be fighting for you and aiding your financial crisis as much as possible. Lastly, know that filing bankruptcy is not about absolutely about how bad your past financial records were, but how efficiently you will be managing your financial undertakings after it.

Tuesday, April 23, 2013

When To File For Bankruptcy - Seven Tips



Bankruptcy is a last resort for many people. Debt is sometimes quite difficult to get out of, and no amount of saving or investment is going to help you in this regard. If you are considering filing for bankruptcy, however, it is important to consider a few things.

Bankruptcy is a legal status that you will take when you cannot pay debts to your creditors. A lot of the time, bankruptcy is usually going to be imposed on an individual via a court order. Some people may see that it is best for them to take bankruptcy on their own in order to avoid having to pay off the large debts that they have acquired.

Your Credit Rating


Your filing for bankruptcy is something that is going to remain on your credit rating for at least ten years. This is why it is important to consider everything when you decide to file for bankruptcy. You need to have a bankruptcy attorney in Gilbert to guide you down the right path.

If you are looking to buy a property within the next ten years, then this is going to end up being very difficult no matter how much money you have.

Creditors' Legal Rights


Bankruptcy does not mean that you can completely avoid your debts. It means that you can only make them wait for you to pay back your debts over time. Essentially, this is a way of buying you time.

Your Co-Signer


The co-signer to any loans that you have taken out is still going to be held responsible for anything that you cannot pay back. This is something that bankruptcy is not going to cover, so remember this.

Debt Collection


If you can go for bankruptcy, then you will be able to stop debt collection harassment. This is often one of the many reasons why many people will seriously consider taking this particular path.

Types


There are different types of bankruptcy that you can choose. If you want to find out more about them, then you are going to have to speak with your lawyer. He or she will be able to run you through the details so that you can make an informed choice when it comes to your financial decisions.

Discrimination


According to the law, you cannot be discriminated against by employers or other institutions just because you are bankrupt. This means that you will have legal protection and be able to get other work.

Cost


There are going to be costs involved when it comes to declaring yourself bankrupt. Each case is going to have a different cost attached to it, though most of the time these are going to be the same. The fees usually fall between $150 and $200.

Make sure to keep all of these points in mind before you decide to take that step. This will ensure that you can make a proper, informed decision.

Author Bio: Ashley is a professional writer. She is interested in writing finance, Money saving related articles.This is one such article which explains on how You can Avoid bankruptcy with Debt Management Counseling & Learn to control your finances by Credit card debt management programs.



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