How to File Bankruptcy the Right Way
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Like almost anything else, there is a right way and a wrong way to file bankruptcy, just as there is a good reason and a bad reason to file bankruptcy. Your success with your filing will depend heavily on what caused you to get into the position of thinking you need to file for bankruptcy, as well as the status of your personal assets.
The most common reasons for filing for bankruptcy are unemployment, huge unexpected medical expenses, marital problems, or largely overextended credit card bills. But filing for bankruptcy may not be the easy way out that many people think it is, and as it actually may have been a few short years ago when the bankruptcy laws were easier and more sympathetic to a person’s circumstances. But the laws today are tougher, and it is very difficult to successfully file bankruptcy without a good case and good reasons to back it up. Also, many people do not consider bankruptcy alternatives, where you need to realize that bankruptcy should be your LAST consideration, not your first one.
First you need to consider your current situation. If you are unemployed, living on welfare or some sort of public assistance program, you have little or no money in any bank accounts, you do not own a car or truck, and/or you rent your home or are living with others, there is very little that bankruptcy can do to resolve or improve your financial situation.
If however you feel that filing bankruptcy is your only option, and I hope you have thoroughly explored all of your options and alternatives before reaching that conclusion, you should definitely discuss this with a good bankruptcy lawyer or bankruptcy attorney. In many cases, your first consultation will be at minimal or even no charge, and the lawyer can advise you as to what course to pursue, or if bankruptcy declaration is going to help, or perhaps make matters very much worse overall. There is a form at my web site which is free and can put you in touch with a local bankruptcy attorney who can look at your unique situation and would be aware and well versed in how bankruptcies are handled in your state and your particular part of the country.
A bankruptcy lawyer can help you determine factors like if it can be proven or demonstrated that you have abused your credit privileges, then you may even be disqualified from filing for bankruptcy. This is known as a “means test”. Of course, there are always unique factors which got you to this situation, such as divorce, medical bills, unexpected and unavoidable large expenses, etc, all of which can play a factor as to whether you can file bankruptcy, and if you can, if it will help you at all.
For most people, the biggest disadvantage to filing personal bankruptcy is the fact that the bankruptcy will appear on your credit report for six years or more after you are discharged from bankruptcy. This is a huge red flag on your credit report, and obtaining new credit after filing for bankruptcy is going to be difficult if not impossible from most traditional lenders and credit card issuers.
With bankruptcy, like anything else, going about it the right way and knowing what you are getting into is the best way to approach it so that you do not end up doing more damage than the situation you are already in.
Jon Arnold
http://www.articlesbase.com/finance-articles/how-to-file-bankruptcy-the-right-way-108133.html
If you file bankruptcy on debt owed to a person, can that person dispute your right to claim that debt?
I am filing bankruptcy and someone is claiming that I owe him some money. If I just go ahead and file the amount on my bankruptcy, can he dispute my right to claim this debt on my bankruptcy and potentionally have a court rule that I must pay him back? He is claiming that this is possible. Thanks in advance!!
It depends on several factors. Generally, a creditor can try to get you to pay a debt included in a bankruptcy only under certain circumstances. The most common is that the debt is a "priority" debt. Only certain debts are priority. The most common is child support and certain taxes, government fines and so forth. Student loans fall into a similar category.
If someone loans you money, and there is no collateral for the loan, it is an "unsecured" debt. There is almost nothing the creditor (the person who loaned you the money) can do. However, there is one thing that the creditor can do. The creditor can claim that you incurred the debt through fraudulent means. There are certain circumstances where this can happen. For instance, if you took on the debt within a certain period of time prior to filing. The most common is someone taking a cash advance on a credit card then filing for bankruptcy within a month or two. There are certain cutoff periods. There is a presumption of fraud because when you borrowed the money, you were likely insolvent already and had no intention of paying back the debt.
The bottom line is that it depends on how long ago you borrowed the money. It also depends on your intentions. If you were unemployed at the time and are still unemployed, the person could argue that you never had any intention of paying it back. The odds of you having to pay it back are slim to none, but it does depend on how long ago you borrowed the money.
Another issue is your income and assets. If you have substantial assets and a good income, you may be forced to file Chapter 13 which requires you to make monthly payments. Your unsecured creditors would get a percentage on the dollar.
I would need more details to give you a more thorough answer.
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