Bankruptcy?

Question

What is involved in filing for bankruptcy?
What are the pros and cons?

Answer 1

I'm a bankruptcy lawyer. Bankruptcy isn't the answer for everyone. If you can avoid bankruptcy, you are better off.

Points against bankruptcy: It will be on your credit report for 10 years. It won't ruin your credit for 10 years but it will result in credit costing more for you if you need it. Your credit will get progressively better in the years following bankruptcy if you keep your agreements.

Bankruptcy doesn't discharge all debts, such as student loans, taxes less than 3 years old (that's an oversimplification but good enough for discussion purposes), domestic support obligations and many others.

Bankruptcy costs time and money. You can plan on something close to $2000 in most large cities and something less than that in smaller towns/rural areas, plus fees and expenses of another $360 or so.

Some people find bankruptcy to be an emotional experience.

Once you file chapter 7, you can't file another one for 8 years. You can't file a chapter 13 and get a discharge for 4 years after you file. So if things get worse, you may be out of luck.

Your non-exempt property will be sold to satisfy debts in chapter 7.


Things in favor of bankruptcy:

You can discharge dischargeable debts.
You can stop harassing creditors/bill collectors
You can keep your exempt property in chapter 7.
You can keep all your property in chapter 13, including property given as security so long as you continue to pay the secured debt.
You can catch up on mortgage arrearages.

There are other advantages to bankruptcy too.

Answer 2

I suggest you check out a website I used during my banklruptcy that was extremely helpful:

www.hummingbirdcreditcounseling.org

Use the first bankruptcy training, with an annonymous name. That way it's free. It will give you the pros and cons or each alternative, for your situation.

If you are even thinking of filing, you should consult a bankruptcy attorney. Many offer a free consultation, and can answer loads of your questions with no initial charge. Mine entered a lot of my data during this consultation, so when I filed it was really easy for him.

The Court will look very closely at your finances, assets and debts. Do not use your charge cards, at all, no matter what. Do not give away anything. If you file, be rigourously honest and don't try to hise or omit anything at all. Deception will get you in big trouble, and they WILL catch you at it.

The bankruptcy law is designed to give you a fresh start and to protect you from creditors. Once you file, all creditors are forbidden to contact you to collect any debt. Once the discharge is granted (4-6 months after filing), the debts approved for discharge are wiped out.

My bankruptcy was recent. They put me through the ringer as far as looking at my income, assets and liabilities. But everyone was professional. Now the Court is hiring a CPA to audit records of anyone filing Chapter 7 who makes more than the average income for your state. You have to open up all your records, but with honesty and cooperation you will get a freesh start.

Answer 3

Bankruptcy is, different types:

Chapter 7
Chapter 11
Chapter 12
Chapter 13

Chapter 7 and Chapter 13 bankruptcy are most important.

In bankruptcy proceedings, There are some peoples involves as

# The debtor
# The creditors
# The trustee : It has appointed by ths cort which has investigated all things like liquidate nonexempt assets, to investigate the debtor´s financial affairs, provide information to parties in interest, examine creditors´ proofs of claim, file reports, estate tax returns and recommend etc..

# The bankruptcy judge

Busby-lee Associates

Answer 4

Bankruptcy should be viewed as the last resort to getting out of debt.

Consider the alternatives of bankruptcy such as debt consolidation and a debt management plan before deciding on declaring bankruptcy.

Listed are several common questions related to bankruptcy.

1. What is a chapter 7 bankruptcy?
Chapter 7 bankruptcy is filed if people have a large amount of unsecured debt they cannot pay. Unsecured debt might come from medical expenses or credit card debt. A debtor may seek protection via chapter 7 bankruptcy if they are suddenly unemployed, are involved in a divorce, or encounter unexpected medical expenses.

2. What is chapter 13 bankruptcy?
Chapter 13 bankruptcy is declared where you are able to retain your personal property like a house and car given you establish a plan of paying off current debts and past-due debts over a three to five year period of time. Debt payments will be calculated so all debts are paid off within the determined period of time. This can account for higher monthly debt payments but will guarantee you debt free at the end of the period of time.

3. What debt will bankruptcy not erase?
- Child support, alimony, fines, and some taxes.
- Debts not listed on the bankruptcy petition.
- Loans gained by knowingly giving false information to a creditor to secure the loan.
- student loans owed to a school or government body, except if the court decides that payment would be an undue hardship.
- Liens which are not paid in the bankruptcy case (bankruptcy will wipe out your obligation to pay additional money if the property is sold by the creditor).

4. Will filing bankruptcy affect my credit?
Most likely, if you are declaring bankruptcy, you already have a bad credit score. Bankruptcy, compared to a history of unpaid bills, is less damaging. Bankruptcy will appear on your credit records for ten years. The best way to restore your credit is to obtain new credit and make the payments on the new debt on time. This can be done by obtaining a secured credit card or an unsecured credit card.

5. Can I be discriminated against for filing bankruptcy?
The law prohibits against discriminatory treatment of debtors by governmental entities and private employers. The law prohibits governmental discrimination by terminating an employee, discriminating with respect to hiring, or denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the existence of your bankruptcy.

If you do look for a debt management plan, watch for scams:

Reputable credit counseling organizations employ counselors who are certified and trained in consumer credit, money and debt management, and budgeting. Those organizations that are nonprofit have a legal obligation to provide education and counseling.

But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make “voluntary” contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling. Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators.

Answer 5

Bankruptcy is for life. Its true that it goes off your credit report after 7 or 10 yrs depending on which type of bankruptcy you file. But, loan applications and many job applications ask if you have ever filed for bankruptcy. Ever. If you lie to get a loan because your bankruptcy is very old, techncally you have committed criminal fraud.

dont do it!

Answer 6

There's a website here which explains what's involved in filing bankruptcy.

Bankruptcy is an absolute last resort and you should only go this route if there is absolutely no alternative.

Good luck!

Answer 7

Yes, its true Bankruptcy is can wipe you out from debt but its better to find best solutions before filing bankruptcy. Before going through ask from an experts for this matter.

Answer 8

i dont regret filing bankruptcy at all. in my case i was able to keep my home. sometimes if you own more than one vehcile with car payments you have to let one go. alot also depends on if you are filing a 7 or 13. i am glad i did not use a credit counseling agency. I defently did not have the money to repay back anything. i filied a chapter 7. i dont care that my credit is ruined. however you can still get credit just with a higher interest rate.

Answer 9

Filing into Bankruptcy really involved your asset to be pay into your debt And my advice is just to keep paying what u can until they r paid off. NEVER consolidate or get a loan unles you have NO other choice!

Answer 10

my brother in law did it years ago so I don't know if the same rules apply but obviously you will not have good credit or any credit for like 7 years, if you have anything....anyhting of value, they will take it and there is a slew of paper work involved..
there really are other ways to get out of debt, I got in some pretty nasty credit card debt when I was younger and I went to a free state sponsered place that helped me to work it all out, it took some time but the up side was a learned a really good lesson, live within my means.....have been okay since then...good luck to you....just remember, this isn't like you killed someone, this is debt and it is really an easy trap to fall into.