Filing for bankrupcy

Should bankruptcy be your last debt resort

Millions of people are having financial troubles, leading them to file for bankruptcy.
All to often using the bankruptcy process as an alternative to solving their financial situation.
It could be a mistake to file for bankruptcy and should be the last resort to your financial woes, not your first choice.
If you are in debt and feel you need to file personal bankruptcy, there are several things you can avoid.

You may be having difficulty meeting or are behind with your rent or mortgage payments, or you're completely extended beyond your credit limit, and the collection agencies are being uncooperative, you need more than a credit counselor.
You may find that declaring yourself bankrupt is not an alternative, it's a necessary solution to file for Chapter 7 or Chapter 13.

Chapter 7 and Chapter 13 are two basic ways of filing for personal bankruptcy.

Chapter 7 allows you to get rid of all debts (except some taxes and usually alimony payments). When in debt and you have a steady income.

Chapter 13 allows you, to pay off your bills up to five years.
According to your personal debt situation, a good bankruptcy attorney, will guide you to the best bankruptcy proceeding you should file,

What happens when you file bankruptcy

Whether you file either Chapter 7 or Chapter 13, the court will issue you a restraining order, which will protect you from all further proceedings against you until all previous debts are cleared.
The restraining order will include protection against wage garnishment, creditor harassment, and foreclosures without a court order.

Chapter 7 is for those who have few or no secured debts, that is, loans that are not backed by collateral.
Credit card debt is unsecured debt, and most people who file Chapter 7 are deep in credit card debt.
By filing Chapter 7, those unsecured debts are forgiven, also you can sign a "reaffirmation agreement" which allows you to keep paying some types of secured debt, such as auto loans.

Chapter 13 is for those with substantial secured debt.
In most cases, that means they have home mortgages.
Under Chapter 13, homeowners can stay in their homes while paying their debts under a court supervised spending plan that lasts up to five years.

Regardless of which chapter you file, 7 or 13 you will almost always be required to pay federal taxes and student-loan debt.

Filing for bankruptcy will give you immediate relief, but the down side is the bankruptcy will remain on your credit record for 10 years.

It is still possible to potentially establish a "new" credit record and obtain a secured credit card. Most companies that offer secured credit cards have guidelines that are very flexible.

Check out the chapter Bankruptcy Myths

Bankruptcy as Your Last Resort

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or call Wayne H. Wagie 786-326-4747

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