Finding yourself overwhelmed with debt and having a hard time making your payments may lead you to believe that you need to file personal bankruptcy.
Before you make this type of major decision, you should know and understand some facts about the bankruptcy process and other options that are available.
There are two main types of personal bankruptcy filings.
Chapter 7 is a total debt erasure bankruptcy and Chapter 13 which is a reorganization bankruptcy.
Each type of bankruptcy has its own procedures and outcome.
One of the things that is important to note is that it is not your decision as to which chapter you file.
Of course, most people would prefer to file chapter 7 and have their debts just go away, but the court makes that decision, not you, based on how your financial situation is presented to the courts.
It is for this primary reason that it is definitely to your benefit to have a qualified lawyer handle your bankruptcy process, if you elect to move forward with it, since they are familiar with what the courts need to see in your documentation.
Chapter 7 is a total absolution of debt by the court system.
You must file all your outstanding bills with the court and if you are awarded a bankruptcy, all your debts will be dismissed.
It sounds great, but it is not.
When you file this type of bankruptcy the court will appoint a clerk to you who will go over all your assets and income.
They will personally catalog all your personal property and they, not you, will determine what needs to be sold to repay some or all of your debts prior to the proceedings.
Each state has individual laws that determine the value of personal property you are allowed to keep.
The figures can be as low as $1000.
00 and this will include things such as your wedding rings and family heirlooms.
You must also be aware that there are some types of debt which cannot be eliminated by bankruptcy.
Chapter 13 bankruptcy is very similar to chapter 7.
The difference is that in this type of filling you are trying to make new arrangements with your creditors for repayment.
Most people who file reorganization bankruptcy are doing it so they can keep their home.
The court will appoint a clerk to this type of case also.
They will determine any property or possessions to be sold to pay your unsecured debt and they will evaluate your debt to income ratio.
This clerk will combine your debts and determine a monthly payment amount that is needed to cover your debts.
You will have to pay the court this amount each month to cover your debts if awarded the bankruptcy.
The court will not take anything but repayment into consideration when they come up with this amount.
There are other alternatives that you can look into for helping you solve your debt problems.
You should be very aware of all the issues that are associated with personal bankruptcy.
Bankruptcy will destroy your credit for many years and the outcome of the debt forgiveness may actually be worse than the problems you are having now.
Before you make this type of major decision, you should know and understand some facts about the bankruptcy process and other options that are available.
There are two main types of personal bankruptcy filings.
Chapter 7 is a total debt erasure bankruptcy and Chapter 13 which is a reorganization bankruptcy.
Each type of bankruptcy has its own procedures and outcome.
One of the things that is important to note is that it is not your decision as to which chapter you file.
Of course, most people would prefer to file chapter 7 and have their debts just go away, but the court makes that decision, not you, based on how your financial situation is presented to the courts.
It is for this primary reason that it is definitely to your benefit to have a qualified lawyer handle your bankruptcy process, if you elect to move forward with it, since they are familiar with what the courts need to see in your documentation.
Chapter 7 is a total absolution of debt by the court system.
You must file all your outstanding bills with the court and if you are awarded a bankruptcy, all your debts will be dismissed.
It sounds great, but it is not.
When you file this type of bankruptcy the court will appoint a clerk to you who will go over all your assets and income.
They will personally catalog all your personal property and they, not you, will determine what needs to be sold to repay some or all of your debts prior to the proceedings.
Each state has individual laws that determine the value of personal property you are allowed to keep.
The figures can be as low as $1000.
00 and this will include things such as your wedding rings and family heirlooms.
You must also be aware that there are some types of debt which cannot be eliminated by bankruptcy.
Chapter 13 bankruptcy is very similar to chapter 7.
The difference is that in this type of filling you are trying to make new arrangements with your creditors for repayment.
Most people who file reorganization bankruptcy are doing it so they can keep their home.
The court will appoint a clerk to this type of case also.
They will determine any property or possessions to be sold to pay your unsecured debt and they will evaluate your debt to income ratio.
This clerk will combine your debts and determine a monthly payment amount that is needed to cover your debts.
You will have to pay the court this amount each month to cover your debts if awarded the bankruptcy.
The court will not take anything but repayment into consideration when they come up with this amount.
There are other alternatives that you can look into for helping you solve your debt problems.
You should be very aware of all the issues that are associated with personal bankruptcy.
Bankruptcy will destroy your credit for many years and the outcome of the debt forgiveness may actually be worse than the problems you are having now.