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Debt is strangling you and your family. Does your stomach twist into knots when you peer into the mailbox? How about when the telephone rings, do you check the caller I.D. and try to screen the collection agencies? Do you find yourself juggling the bills, paying off one and postponing another till it’s overdue? These hopeless feelings carry into all of life; the family notices the strain. You are short tempered and lacking the energy or desire to do anything more than just the minimum to make it through the day. Bankruptcy, that step you never thought you’d take, begins to look pretty good. The creditors will stop calling, the credit card statements will cease. You could start over. This does sound good, but before you take that step, think through very clearly and carefully the serious ramifications of bankruptcy. There may be more results to filing bankruptcy than you realize. There are certainly more affects than just the bills magically disappearing. Before you file, reconsider. And read on. Following, you will find a few of the results of bankruptcy.

Credit Your credit report will show a bankruptcy for up to ten years. You may not be able to borrow money during that time, or if you can find a creditor who will loan you money, you will pay higher interest rates. Do you want to purchase a house or a car within the next ten years? If so, the larger payment amount from the higher interest rate may actually cause you to pay back more than you have been forgiven through bankruptcy. Think about how much has happened to you in the previous ten years. Have you gotten married, divorced, moved, had children? What will the next ten years be like? Do you want the poor credit rating affecting you during the upcoming life changes?

Employment Employers will not look favorably upon a bankruptcy in your history. Do you want to change jobs in the next ten years? A bankruptcy may keep you from being hired. Actually, a bankruptcy may affect your job prospects for the rest of your life. Even after the bankruptcy is cleared from your credit history, prospective employers may ask you about any bankruptcy in your history and it just may cost you your dream job.

Guilt Most people will carry a certain amount of guilt over a bankruptcy. Most Americans want to pay their bills. If you have certain bills wiped out through bankruptcy, you most likely will carry guilt about it.

The Problems Don’t Go Away For most of us, we don’t get into financial problems overnight. We develop habits over a long period of time. We spend more than we earn. We take risks and gamble what we can’t afford to lose. After the debts disappear through bankruptcy, the habits we’ve developed don’t magically change. The next day after filing, we are still the same people we were before, Unless we somehow make significant changes in our habits and lifestyle, a few months or years from now, we’ll be right back to where we started with more debt than we can handle. Don’t discount this point. Have you ever lost weight by dieting only to gain it back again? You get the point. In dieting, it is necessary to make permanent lifestyle changes in order to keep the weight off. Like dieting, changes in our lifestyle of handling finances will be necessary to keep the budget in order. So if you want to reconsider bankruptcy, what are some options?

Fix the Leak For years I have worked as a plumber. When I receive a call for water dripping from a ceiling, I can’t just fix the ceiling. I first must locate the source of the leak and repair it; then, and only then can the ceiling be fixed. Find the leak in your budget. Get help to do this. Find a reputable financial counselor to assist you in this. In order to find one, ask around. Ask friends, a pastor, a bank officer; someone will know someone who does this. Find the leak and fix it. Figure out where you are spending more than you should.

Options A good financial counselor/advisor should also be able to assist you in finding alternatives to bankruptcy. You might have to consolidate some loans. You may have to sell some things. Maybe you’ll have to cut down to a bare bones budget. Consider a third party debt negotiator who can work with your creditors to arrange a pay back schedule. If doing all of these things can prevent bankruptcy, the short term pain of crisis financial dieting would be well worth avoiding the long term pain of bankruptcy.

Sometimes bankruptcy is the only viable option left. After you have exhausted all avenues of digging out of the financial crisis and bankruptcy is all you are left with, then you may want to choose the bankruptcy option. But before you do file, be sure that you have examined the alternative options. You may just save yourself a lifetime of added difficulty and regret.

For more information about options to bankruptcy check out my website at www.avoidchapter11.info

The author does not intend this article to be a substitute for legal advice. If you seek legal advice, please inquire with a qualified legal professional.

Get more credit-related answer to your questions and turn your life around and get back on financial track with Credit Report.

creditreport
http://www.articlesbase.com/credit-articles/before-filing-bankruptcy-reconsider-736496.html

Bankruptcy is the legal means of wiping out debt. It may seem like a simple solution when you get in over your head in debt. Bankruptcy, though, should not be taken lightly. There are many repercussions of filing bankruptcy.

Before you file bankruptcy you should have a good understanding of the process and what to expect after you have competed filing.

Bankruptcy is meant to give a person a fresh start by relieving debt. A person can file bankruptcy for most debts they have incurred. Some debts can not be cleared through bankruptcy, though. It is very important for a person to check each of their debts to see if they can be cleared through filing.

During a bankruptcy proceeding a person has to make attempts to pay what they can. Most assets and cash on hand is seized and used to pay off the debts. There are some assets which are exempt and can not be used to pay off debts. Once a person starts bankruptcy proceedings creditors can no longer attempt to collect debts from them.

Bankruptcy is filed in a U.S. Bankruptcy Court. There are six types of bankruptcy. Only a few of these apply to an individual. Chapter 7 and Chapter 13 bankruptcies are the most commonly filed by individuals.

Under Chapter 13 a repayment plan is set up instead of assets being seized. The exempt assets list varies from state to state, so a person should check their states bankruptcy laws to see what assets they will not have to surrender.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed how individuals file bankruptcy. The aim of this act is to prevent people from using bankruptcy as a way to get out of debt and instead use alternatives to help them get out of debt.

It bases the idea of paying back debts on a person income. If a person has the ability to payback their debts then they are required to do so. It also requires credit counselling to help ensure a person does not end up with debt problems in the future.

Perhaps the most important point for a person to understand about bankruptcy is that it is not just an easy method to clear debts. When a person files for bankruptcy the creditors are not just going to walk away. The court will try to ensure that every step is taken to pay back as much debt as possible.

The court will force a person to sell their assets, like their vehicle, to pay off the debts. Bankruptcy is more about protecting the individual from having creditors harass them or attempt to collect debts. Once a debt is cleared through bankruptcy, the creditor can not attempt to collect on the debt ever again.

James Copper
http://www.articlesbase.com/finance-articles/what-you-need-to-know-about-bankruptcy-131966.html

Bankruptcy liquidation also known as Chapter 7 Bankruptcy is a legal process where most if not all of your debt can be eliminated. It may take four up to six months and currently costs $299 to file. Bankruptcy liquidation can be used by individuals and businesses.

However, it is not as simple as filing a petition and the court grants the request. In bankruptcy liquidation, the debtor has to give up certain properties to be sold or liquidated in order to pay off as much of the debt as possible. The bankruptcy laws in your state dictate what property can and cannot be taken away from you. In general, properties of necessity such as clothing, household items, and tools you need for your profession are considered exempt. When you do not have much property that can be liquidated your case will be classified as no asset and there will be no payment distribution to your creditors.

In order to be eligible, you should not have received a chapter 7 bankruptcy discharge within the past 8 years or a chapter 13 bankruptcy discharge within the past 6 years. Your monthly income should be lower or equivalent to the median income of your state. You will be required to take a means test to determine your eligibility.

Before filing for bankruptcy liquidation, you will have to get credit counseling from an agency that has received approval from the United States Trustee. Afterwards, you can proceed with filling out all the necessary bankruptcy forms, which will basically ask you to state the source and amount of your income, monthly expenses, debts, and information about your assets. You need to file these forms along with the certificate of your credit counseling session with your local bankruptcy court.

Once you have filed for bankruptcy liquidation, a rule called automatic stay takes effect which can be very helpful in urgent situations. It temporary protects you from lawsuits, wage garnishments, eviction, foreclosure, and disconnection of utilities supplies.

When you file your case, the court will appoint a trustee whose duty is to liquidate your non-exempt assets and distribute payment to your creditors. A week or so after you have filed you and the creditors you have listed will be sent a notice informing you about the creditors meeting. During this meeting, you will be under oath while the trustee questions you about the information you have provided in your bankruptcy papers. Usually, this meeting does not last more than 10 minutes.

The last stage in the bankruptcy liquidation process is the discharge of debt. You must take note that certain debts may not be eliminated such as family or child support, student loans or tax debt. Once you have received bankruptcy discharge, you are free from any legal obligation to pay the creditors of your discharged debt. The record of your filing will be on your credit report for the next 10 years.

T J Madigan
http://www.articlesbase.com/finance-articles/what-is-bankruptcy-liquidation-97284.html

Today’s culture has seen an unmatched rise in the number of people who file personal bankruptcy. With the amount of consumer debt at an all-time high, a growing number of people feel that this is the best option for them so they can start over with their finances.

The only problem with this idea is that it does not change a person’s behavior. Instead, it almost reinforces the irresponsible habits and behaviors that resulted in the debt in the first place. People who find themselves in this predicament and want to avoid personal bankruptcy will want to look into bankruptcy alternatives before making their final decision.

Bankruptcy is, in a nutshell, a person’s inability to repay the debts that they have accumulated with any number of creditors. When a person decides to file bankruptcy, they are often admitting that they see no way out of the debt that they have built up.

This can happen over a period of a few months or several years and for a variety of reasons, including school loans, medical bills, and credit cards, among others. Many people encounter circumstances that make it difficult to repay their debts while others might buy a lot of stuff on credit with the plan of declaring bankruptcy the entire time.

For years, many people decided to file bankruptcy in order to rid themselves of their student loans. Unfortunately for some people, the United States has recently made laws that exempt federal student loans from personal bankruptcy status. This means that even when a person has declared bankruptcy, they are still responsible for their federal student loans. Currently, this is the only exemption that debtors cannot add to their bankruptcy, but certain circumstances can allow for special provisions in very few cases.

For those who want to avoid bankruptcy, there are several ways to get out of what might seem to be insurmountable debt. Several bankruptcy alternatives are available and they are worth the extra amount of effort and work in order to preserve your credit.

Since the United States passed new laws, it is almost impossible to have all of your debts simply relieved. Debts are more likely placed in a repayment plan with courts relegating a percentage of your income to each debt. The problem with this is that you can make deals with your creditors to make payments yourself without damaging your credit as much as a personal bankruptcy would do.

Even if it takes some hard work and effort, researching your financial options is of utmost importance for making the right decision. Instead of just allowing a personal bankruptcy to affect your credit for years to come, look into the ramifications it will have on your financial future.

For instance, it will always affect your ability to get a low interest rate when you decide to buy a home or for many other types of major purchases. The best thing to do is to pick up as much overtime and negotiate with your creditors in order to pay them off. Of course, it will take some extra effort on your part, but your credit rating will thank you for it.

MIKE SELVON
http://www.articlesbase.com/finance-articles/the-reasons-to-fight-filing-for-personal-bankruptcy-140162.html

Bankruptcy is one option to consider in order giving yourself a “fresh start,” when you have more debts than you have assets. There are in fact many types of bankruptcy provided under the law but the most common is Chapter 7 bankruptcy, which is also known as liquidation.

When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.

All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.

Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:

Step 1: Decide whether you should file bankruptcy or not.

Filing bankruptcy is a personal decision, influenced by many factors, such as the amount of serious debts and your ability to meet the original payments or pay the full amount. For starters, when you are broke, it is never a nice experience getting harassed by creditors for debts incurred. For another, your decision to file should not be made for the sole purpose of putting a stop to your demanding creditors.

This is a significant point as secured creditors may apply for “relief from stay,” thus allowing them to continue their efforts to repossess or foreclose even though you already filed for bankruptcy.

Step 2: Get an attorney

While the law on Chapter 7 bankruptcy does not need individual consumers to hire an attorney who would represent them in court, it is still advisable to ask for legal help, particularly concerning critical decisions involved in bankruptcy.

Step 3: Comply with the legal requirements.

File your petition with the bankruptcy court serving in your area. If you are a business debtor, then file with the bankruptcy court in the place where the business was organized or has its principal place of business or principal assets. Your attorney should be able to advise you on how to deal with these required legal forms.

Step 4: Pay the necessary fees.

As with any other court cases, there are certain fees required, such as:

• Case filing fee

• Miscellaneous administrative fee

• Trustee surcharge

Upon filing, you are usually asked to pay these fees to the clerk of court.

Note that the number of installments is limited only to four. Additionally to that, you are also required to make the final installment no later than 120 days after filing the petition.

Step 5: Notice to the creditors and meeting.

After filing your petition for bankruptcy under Chapter 7, paying the necessary fees, and complying with the legal requirements, an “automatic stay” is granted to you by operation of law. This stay will efficiently stop most collection actions against you and your properties. This means that as long as the stay is in effect, creditors cannot initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.

After the bankruptcy case has been filed, the bankruptcy clerk will give notice to all creditors whose names and addresses you provided. Then, the case trustee will hold a meeting of creditors between 20 and 40 days after you filed your petition.

Step 6: Cooperate with the trustee.

The case trustee has a vital role in a bankruptcy case. His primary responsibility is to liquidate your nonexempt assets in a manner that maximizes the return to your unsecured creditors. He does this by selling your property, if it is free and clear of liens and as long as it is not exempt, or if it worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property.

In view of the broadness of a trustee’s power, it is significant therefore that you cooperate with the trustee. Provide any financial records or documents that the trustee requests and answer questions, which the trustee is necessary to ask at the meeting of creditors under the Bankruptcy Code.

Step 7: After the discharge…

If all goes well with your Chapter 7 bankruptcy case – that is, no one files a complaint objecting to the discharge or a motion to extend the time to object – the bankruptcy court will issue a discharge order relatively early in the case, about 60 to 90 days after the date first set for the meeting of creditors

A discharge order is an order issued by the bankruptcy court, releasing you from personal liability for most debts and preventing your creditors from taking any collection actions against you. As a rule, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of Chapter 7 bankruptcy cases.

For someone filing under Chapter 7 bankruptcy, a discharge of almost all of your debts is the ultimate goal. With the release of all your debts and creditors stopped from pursuing any further collection actions against you, the opportunity for a fresh start is apparent.

Pnreddy
http://www.articlesbase.com/debt-consolidation-articles/7-steps-to-a-fresh-start-after-bankruptcy-112592.html