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Filing for Bankruptcy is it right for you?
There once was a time that filing for Bankruptcy was considered a stigma, but now-a-days that has diminished with more and more Americans have filed for bankruptcy. As some use this use this as a quick means to financial freedom, some people truly contemplate filing for bankruptcy as their last result.
Meaning of Bankruptcy
Bankruptcy is a legal procedure that is way to give people a fresh start to their new financial freedom that can’t normally do it on their own.
There are three types of Bankruptcy that are available:
Chapter 13 – meaning a reorganization of one’s assets that allows you to keep certain properties that may give you three to five years to pay off your current debts. The court will assign a trustee to monitor your repayments and to provide documentation to your creditors regarding your financial information.
Chapter 7 – This type of bankruptcy involves liquidating all of one’s assets. Depending on your state, some items maybe exempt such as home, car, household items, clothes, furnishings, and pensions. Your property can be sold by a court appointed trustee, which usually takes about four to six months. You are allowed to file once every six years and this filing will remain on your credit report for ten years.
Chapter 11 – This bankruptcy is generally for businesses that want to reorganize. This type of bankruptcy allows businesses to continue their operations while repaying their creditors through a court approved plan.
Once you have decided to file for bankruptcy, you must file your paperwork in federal court. There is usually a filing fee of about $200 some places allow you to make payments. This is usually down by a bankruptcy attorney, your best bet is to contact your family or friends a get a personal referral. As dealing with any attorney they too will have their additional fees along with your filing fee. So beware and do your homework.
Bankruptcy and fix your current credit problems but it will not clean up your bad credit report and will be apart of your credit report for ten years. It might take you some time after filing your bankruptcy and it becoming final before you can get a credit card or a mortgage. |
