Want more information about bankruptcy filings?  Visit htp://www.uscourts.gov and see for yourself.  This certainly suggests that the “recovery” has yet to begin.

We have a number of FREE reports on housing options and one on bankruptcy.  Simply visit http://www.ShortSaleSecrets.org and look under the “resources” Tab.  Download any/all reports that might be of interest to you.    Get as much information as you can, read books, articles, speak to your attorney and account and even the IRS help line at 1-800-829-1040.  When you are a fully informed consumer, you will be able to make the decision that suits your situation best.

Debt Relief Advice – How to Avoid BanBy Mason Lewis

In today’s world debt relief advice are coming up in new forms. When the consumers are covered with huge load of arrears they are totally become inadvertent. The main mistakes are done by them at the beginning. The customers are very excited and happy of being credit card in hand. And somehow they forget to pay the bills of the master card. They rise from this imagination when the plastic card companies start pressurizing them. At that time they are searching for the options which help them to be free from debts. The options are debt settlement, bankruptcy, credit counseling and many more.

At present liability consolidation programs are strewn in the whole world. On the other hand bankruptcy is also a good option but it has a negative impact on both the consumers as well as the loan givers. Hence if the non payers fill this process then they will lose their credibility and they would not able to get for further plastics from creditors for next few years. This procedure is not favorable. One thing you must keep in mind that you never get into the personal debt. The best way to avoid insolvency is that you can understand and realize that you are living only within your income.

Being in severe financial and monetary crisis it’s the best time to look forward to the professional debt relief advice. The prominent remedy to avoid this method is tried to pay off the liability. It is known that this might be a little bit tough for you. You are responsible for this whole situation. And there is no escape from this fearful phase. The sooner you start paying the better for you. To avoid insolvency you first determined your requirements and need. It is better to buy the products according to your needs and save some money in the refund.

Insolvency may be an escape for some people but it takes 8-10 years to help you from out of liabilities. This process causes you many problems in your personal and professional life in the near future. Some debt relief advice is not acting up to the expected standard.

Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That’s why it’s so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies. To find a legitimate debt settlement company in your state check out the following link:

Free Debt Advice.

Article Source: http://EzineArticles.com/?expert=Mason_Lewis
http://EzineArticles.com/?Debt-Relief-Advice—How-to-Avoid-Bankruptcy&id=4571654

VA and FHA tends to be much more lenient on approving a loan after a bankruptcy.  In fact, with FHA we can get you a new loan or refinance your existing loan if you have a chapter 13 bankruptcy and have had on time payments for the past 12 months.  VA generally requires 2 years from the discharge date.  Conventional loans (Fannies Mae & Freddie Mac) tend to require the longest time line from a bankruptcy-usually 3-7 years.  It all depends if you have a chapter 7 or a chapter 13 bankruptcy.  You can view the PDF of the Fannie Mae rules to see how they are currently underwriting when someone has had a foreclosure.

FannieBankruptcyFC.pdf

By Alexander Wennstrom

If you should pose the above-mentioned question to a bankruptcy law expert or attorney bankruptcy law professional, the answers might surprise you. Mostly those who have not been successful to fend off, stave or avoid bankruptcy, are looking for quick fixes. Once they realize that the blemish will be affecting their credit rating, ability to access financing, loans and other financial necessities like a check-book, savings account, bank loans, car loans, mortgages etc. they are more motivated than ever to turn a new leave, recover from this blemish in half the time, making every moment of bankruptcy recovery count, matter and making a difference, having positive impact.

Credit counseling services and debt consolidators all tote and advocate doing everything in your power to boost your credit rating, live some good habits, avoid errors and ills from before, returning to your spending and lending, financial administration, regardless of the personal bankruptcy, chapter 7 bankruptcy or business bankruptcy filing.

Bankruptcy attorney California practitioner shingles, business cards and adverts, online websites and even mega-sites, all tote and advocate very comprehensive bankruptcy services for those in desperate search of answers. Many focus on what to do every step of the way, planning, preparing, filing and even optimizing recovery strategies, phases and solutions.

Advice and input on and for home equity loan bankruptcy type instruments, remedies and hopes. Tips for securing a bankruptcy loan, filling out an application, amendment, appendices for the required bankruptcy form and documentation, for formally and legally filing bankruptcy, effectively starting the process (that could sometimes take as long as a year to wrap up) all get attention as does what to do and what not to do after filing, discharge etc. as the bankrupt regain their footing and try to claim and re-establish some freedoms, rights and privileges of lending, borrowing, access, rates etc.

Florida bankruptcy experts and markets have expanded in recent downturns in the real estate market, with increased in foreclosures. Many a Florida bankruptcy lawyer and even bankruptcy Los Angeles practitioners alike, are seeing more and more after bankruptcy challenges and recovery issues, with all this market-driven and sparked activity.

Securing a bankruptcy car loan or getting your hands on the required cash or choice, market-competitive after bankruptcy car loan rate, terms and stipulations, might prove a little more than challenging. It is hard to find those institutions willing to deal and do business with what most would consider to be a credit risk. Even something as standard as a car loan after bankruptcy, can prove to be almost impossible to get, unless you do some creative financing or are willing to pay higher rates.

The more you read this enticing title, (phrased purposely as a how to type question), invitation to the masses, suffering in the aftermath of their bankruptcy filing and recovery stages, the more you hope that there is really a way to actually do what it says!

Putting it into practice unearths numerous ways that this could be more like just a sounds-like-it-might-be-possible type teaser or hyped promise that no-one could really successfully live up to ore deliver on. Yet, there is some light at the end of the tunnel and some hope!

Bankruptcy recovery in half the time, sounds too good to be true, almost. Mockingly hollow, just empty words, not feasible, possible, realistic or legal (?). What are your thoughts? Do you think it possible? How would you go about it? Are there ways to do it effectively?

Well, it is fair to respond to this controversial statement and claim, depending on how you read and interpret it of course, with a lot of skepticism, questions and doubts. Take a closer look at what we are dealing with here, though. There are mandatory aspects of the process to take into consideration. Certain aspects of the process simply take as long as it takes. The credit reports will have this entry as part of the public records, as per law and court ruling for period of 7-10 years for example.

Recovery, how to RECOVER from bankruptcy – what do you understand that term to mean?

What is bankruptcy exactly ? What is the nature, different types of filings, implications and durations of each? How are they similar? How do they differ? How do you deal with each of them in order to facilitate and expedite the recovery phase and time-frame?

How long does it take normally or typically for credit consolidation, repair, bankruptcy recovery?

Half the time means what exactly? What is the typical recovery time frame for these types of filings (both Chapter 7 and Chapter 13, personal, business etc.)

What is your measure of creditworthiness and how can you improve it?

These are the real questions and eventually even answers that can be inferred and turned into a set of practical tips and how to’s. The secret here is to ask the right type of questions. Educate and empower yourself about how credit reporting systems work for example and how to make them count in your favor, despite a recorded bankruptcy filing entry.

Records of timely repayment will also reflect well on you – you can increase your credit score after bankruptcy – opening a checking and savings account at the local bank

Most will tell you 7-10 years that you will have to wait and live with the one mistake and aftermath of bad judgment, worsening debt/credit and declared bankruptcy on your credit reports and negatively impacted financial standing, reputation, with little or no recourse of action or retribution other than letting time pass and keeping your nose clean. That simply is not entirely the whole picture or the only truth, path and remedy.

The encouraging words from any knowledgeable bankruptcy attorney are that you can finally do something pro-active about improving your credit scores, if you will and want to.

Utilizing bankruptcy recovery and credit repair strategies that work, can save you precious time and standing, in record and no time flat! Taking the first step sooner rather than later, with immediacy and urgency is extremely important. It shows that you are proactive and serious about your finances and getting your credit back, despite for example having a chapter 7 or 13 bankruptcy on your record.

Bankruptcy does not have to be a doomsday, inevitability type death sentence. It all depends on what you understand that recovery to mean specifically. If you are trying to get your credit and standing back like what you had prior to your filing, yes, that will take time, effort and some creative doing. BUT, if you are working towards merely again getting approved for loans, having credit and credit cards at your disposal, despite declaring personal bankruptcy, then you are ready to do so quickly, even in under eight to ten months if you set your mind to it.

Negotiating for better interest rates and terms, even for non-filers of bankruptcy, can be quite possible, with a little know how, insider information, processes, protocol and maybe even some representation, where you cannot do it yourself.

Getting a strategy together quickly and in the works, to embrace life after bankruptcy for all its has to offer, is what the real key and secret is.

A bankruptcy lawyer can take you through some of the legal implications and issues pertaining to your filing, recovery, rights and freedoms. If you have failed before to avoid bankruptcy, it is not an unforgivable sin, disarming you from all responsible financial decision-making and fiscal transactions.

You can still get credit, buy a car, home, get a loan, despite what you might think and look at when faced with the realities and intricacies, dynamics and implications of the on-file declaration of bankruptcy (regardless of type, how long it has been etc.). THERE IS HOPE!

Visit the site for more information if you are serious about getting out of debt and recover from bankruptcy: Avoid Bankruptcy [http://www.toavoidbankruptcy.com/bankruptcy/index.html]

Article Source: http://EzineArticles.com/?expert=Alexander_Wennstrom
http://EzineArticles.com/?How-To-Recover-From-Bankruptcy-In-Half-The-Time&id=690326

By Richard Waple

Bankruptcy mistakes can be very costly and all too often an individual filing bankruptcy will make inadvertent mistakes that jeopardize their chance of discharging their debts and retaining exempted property. Avoid these Top 10 mistakes and you will be well on your way to a successful bankruptcy filing.

1. Transferring Real Estate or Other Assets: Some people try and protect their assets by transferring them out of their name, but this strategy will not work in a bankruptcy proceeding. Recent property transfers must be disclosed to the bankruptcy trustee and the bankruptcy court may “avoid the transfer” and put the parties in the same position they were in before the transfer. Even if you don’t feel that the property or asset that your name is rightfully yours, the bankruptcy court may still “avoid the transfer”. It is often unnecessary to transfer any property or assets before filing bankruptcy as each state has bankruptcy exemptions designed to protect all or a portion of your assets.

2. Transferring Credit Card Balances: Transferring a large amount of debt to one credit card can result in debt on the new credit card not being eliminated due to the large amount of debt incurred to one creditor right before filing bankruptcy. The new creditor may have a strong argument that the balance transfer should be presumed fraudulent, especially if the transfer was within 60 days prior to filing and over $1500.

3. Repaying Loans to Family Members: The bankruptcy code requires that you treat all of your creditors equally and does not want you choosing which creditors to repay right before filing bankruptcy. You can’t repay Uncle Bob the $2000 from when the furnace went at the expense of your other creditors. The bankruptcy trustee may pursue the relative for a portion of any funds recently transferred to them. You are required to list debts that are owed to family members, but assuming there is no discharge objection brought, the debt will be legally eliminated and you can repay the loan if you choose to.

4. Not Including All Your Debts on your Bankruptcy Petition: You are required by law to include all of your debts on your bankruptcy petition, even if you want to keep the debt. If you want to keep your house and automobile when you file a Chapter 7 bankruptcy, you usually will sign a reaffirmation agreement with the bankruptcy court excluding the discharge of those specific debts.

5. Ignoring Lawsuits: Many people fear lawsuits and don’t know what to do when they get a summons in the mail. In most cases, if you have already filed bankruptcy and receive a summons from a debt listed on your bankruptcy petition, your bankruptcy attorney should be able to fax your case information to the creditor’s attorney and get the case dismissed. However, if you are in the process of filing bankruptcy, but the case is not officially filed yet, it can be helpful to attend the designated court hearing and request a continuance to give you an opportunity to file for bankruptcy relief.

6. Withholding Information from Your Bankruptcy Lawyer: Bankruptcy Lawyers are often frustrated at 341 hearings when their clients are placed under oath and disclose new information that was previously withheld from their attorney. Bankruptcy lawyers need all the requested information to properly advise you and protect your income and assets. The horror stories about bankruptcy that we’ve all heard are frequently due to an individual failing to disclose vital information to a qualified bankruptcy attorney for proper advice and planning.

7. Cashing in 401(k)’s, IRA’s, and other Retirement Funds: Generally, 401(k)’s, IRA’s, and other retirement funds are protected from the reach of your creditors and are allowed to be kept during and after a bankruptcy. However, a common mistake is people cashing in their retirement accounts or obtaining a loan. The money that is taken out of your retirement account is no longer protected from your creditors, and you’ll likely owe penalties and taxes on any accounts that were cashed in.

8. Filing Bankruptcy when you are expecting a Large Tax Return: In many states, a tax refund is considered to be an asset that can be liquidated if the bankruptcy exemptions aren’t enough to protect it. Depending on the amount of the refund and the relevant state laws, it is often advisable for you to receive your tax refund and spend the proceeds on living necessities before the bankruptcy is filed. Many states offer a “wildcard” exemption that can be used to protect tax refunds among other things.

9. Waiting Until the Last Minute Before Filing Bankruptcy: The moment you file a bankruptcy an “automatic stay” goes into place which prohibits your creditors from any further collection activity against you, but it is unlikely that you will be able to recover any wages garnished or property taken before the filing of the case. Too many people wait until their creditors have already taken action against them before consulting with a bankruptcy attorney. It can take considerable time to prepare the bankruptcy petition, review the relevant documentation, and be certified by a trustee approved credit counseling agency. Once you have made the decision that bankruptcy is your best alternative, you should file as soon as possible to avoid anymore creditor harassment and allow yourself to put future earnings towards long-term goals and savings instead of chipping away at an insurmountable amount of debt.

10. Not Hiring a Bankruptcy Attorney: Fortunately, experienced bankruptcy attorneys are aware of all of these common mistakes and many more. Bankruptcy is a complex area of the law and the process has being further complicated with the new bankruptcy laws. Mistakes can be costly and a thorough case evaluation from a local bankruptcy attorney is the best way to identify any possible issues and develop a strategy to relieve your debt problems.

Richard Waple is the creator of http://www.bankruptcyhq.com, a bankruptcy information website containing insight and information primarily based on Richard’s experiences as a bankruptcy attorney with one of the largest consumer bankruptcy law firms in the nation.

Article Source: http://EzineArticles.com/?expert=Richard_Waple
http://EzineArticles.com/?Top-10-Bankruptcy-Mistakes&id=549194

By Kirthy Shetty

Bankruptcy stains a debtor’s financial life and reflects badly on his credit. He sometimes feels that all avenues for funding any further need in his life is closed for ever. But a cheap fast bankruptcy loan can help you out of your financial predicament and provide you loans after bankruptcy. Fast Bankruptcy loans can help you live in your dream home, drive a car of your choice or set up a new business after you have been discharged of your bankruptcy. Provided you have paid back all your creditors and cheap bankruptcy loan can help a bankrupt, post-bankruptcy.

Cheap Fast Bankruptcy loans: How does it work for a bankrupt?

Cheap fast bankruptcy loans are usually referred to people who have filed bankrupt by bankruptcy attorney and have discharged their bankruptcy in other words have repaid all their creditors and have emerged out of debt. However, it does not serve a bankrupt who has just been discharged of his bankruptcy recently, say less than two years. The reason being a lender does not want to jeopardize his cheap loan amount by making fast loan approvals to a credit challenged bankrupt.

It is quite challenging to take up a fast bankruptcy loan with in two years of bankruptcy discharge. The two factors that play a pivotal role in facing this challenge and approving you a cheap bankruptcy loan despite of recently discharged bankruptcy is that clean credit report and your down payment. While you have been declared bankrupt, if you have made your payments regularly then you will have a flawless credit and you can be a strong contender for cheap fast bankruptcy loan. With a sound down payment say 3-5% no lender will refuse a post- bankruptcy loan. Few bankruptcy advisors do add that its not enough if you have a flawless credit history and a down payment but also proof of constant income. Not all income is considered sufficient enough to obtain a post-bankruptcy loan.

IVA Spacialist – Chapter 7 and Chapter 13 bankruptcy

If you have filed for chapter 7 bankruptcy, then an online bankruptcy loan will be made to you only after your two year completion of bankruptcy discharge. Bankruptcy loan is approved fast to a chapter 13 bankrupt on condition that he has made his full payment to all his creditors.

Fast Bankruptcy loan: how to raise down payments?

In order to increase your chance of cheap loan approval before two year of bankruptcy discharge, you need to make some down payments.

Seek financial aid from your relatives or friends and repay them later with the help of second mortgage after you have obtained a bankruptcy loan or

Look out for down payment assistance online or

Request for grants online

Now, you no more have to feel financially stressed or run from pillar to post to raise funds post-bankruptcy. An array of online bankruptcy loan will ease your financial burden and get you fast loan after you have merged out of your debts. Your dream home or a dream car can take wings with uk cheap bankruptcy loan even after your bankruptcy discharge. Also avail of online quotes and compare the loan terms, conditions and rates before you take up a loan.

Get free bankruptcy advice and information online – Advice IVA

Read more on or inquire about bankruptcy alternative – Bankruptcy Alternative-IVA, Debt Consolidation, CCJ

Article Source: http://EzineArticles.com/?expert=Kirthy_Shetty
http://EzineArticles.com/?Cheap-Fast-Bankruptcy-Loans!&id=457928

By Dean Shainin

One must avoid bankruptcy while he still can. Filing bankruptcy may save one from his debts, yet this has serious demands and consequences so it shouldn’t be dealt with without due consideration.

Avoid bankruptcy and one also avoids its profuse demands.

So should one avoid bankruptcy?

This stringency in bankruptcy is (blamed) justifiable against Bankruptcy Fraud of those with the criminal intention of evading provision/payment for ‘debts’ although they have funds to use as payment – so-called petition mills, false oath, assets concealment, and fraudulent conveyance of property. Even the use of multiple-filings as ‘strategic’ bankruptcy (which is not a fraudulent criminal act per-se), is an all-precarious move, creating court-prejudice against the filer if evidence shows that the bankruptcy is being used strategically. Enough exasperating reasons for apt individuals to avoid bankruptcy, there are even more practical reasons to avoid bankruptcy: the filing cost, penalties, what you lose, finding an attorney, making a court-appearance, not to mention the obvious stigmas and disentitlements.

Even if one succeeds in the bankruptcy plan, being able to put up with the repayment plan until the end and even finding creditors granting credit at the end of the repayment period, the bankruptcy could still stay on the debtor’s credit history for 6-10years.

Bankruptcy shouldn’t be taken casually. Avoid bankruptcy, if at all possible, and make a smart fiscal move.

Different Effective Bankruptcy Alternatives To Consider

Bankruptcy is a legal term that allows individuals or businesses who in debt to others more money than they are able to pay to either work out a plan to repay the money over time or completely eliminate most of the bills.

Though most bankruptcies are granted, it doesn’t mean that it would be an easy way out of anyone’s debt. Extensive damages to credits and long term issues from bankruptcy will cause many problems in the years to come and it is definitely far better to explore different bankruptcy alternatives before making a decision to file for personal bankruptcy. Bankruptcy alternatives will help one person to save himself from further devastation.

The existence of various bankruptcy alternatives helps one to consider several options as to what they want to pursue other that personal bankruptcy.

The following are 3 bankruptcy alternatives one might want to consider other than personal bankruptcy:

1. Renegotiate secured loans as bankruptcy alternative:

Bankruptcy does not get rid of all one’s debt. If one’s debt has not completely caught up with you and ruined one’s credit already, he or she may be able to renegotiate these loans with creditors or take the loan elsewhere. This is the principle of renegotiating secured loans as bankruptcy alternative

2. Renegotiation of unsecured loans:

Another bankruptcy alternative is the renegotiation of unsecured loans. Unsecured loans are far more at risk and there may be more wiggle room in this bankruptcy alternative. Professional debt negotiation is another bankruptcy alternative

3. Professional debt negotiation:

Professional debt negotiation is another bankruptcy alternative. Here, debt negotiation companies do much of the work by developing and taking care of one’s case to the creditors.

Dean Shainin offers online Bankruptcy and debt advice. For more information, articles, current news, tools and valuable resources on bankruptcy and debt solutions, visit this site: Bankruptcy Alternatives

Article Source: http://EzineArticles.com/?expert=Dean_Shainin
http://EzineArticles.com/?Avoid-Bankruptcy-With-3-Effective-Alternatives&id=302025

By Cole Collins

The reasons to avoid bankruptcy.

The number of people filing for bankruptcy in 2006 was 617,660 – in 2007 that number increased to 850,912. Bankruptcy is turning into the most convenient option for people who are facing severe financial problems. However, strikingly, the majority of these people are ignorant of two very significant factors. One, bankruptcy is not the best solution for all people who are burdened by debt. Two, bankruptcy has long term consequences that can have a negative effect on your life forever.

What is bankruptcy and why you should avoid it

The definition of bankruptcy is a federal court process that exists to help businesses and consumers repay their debt or eliminate their debt under the protection of bankruptcy court. The term bankruptcy comes from the Italian work ‘banca rotta’ which means broken bench. District courts take care of bankruptcy filings and procedures under the Federal Bankruptcy Act.

Types of Bankruptcy

There are eight chapters of the Federal Bankruptcy Code. These consist of Chapter 1, Chapter 3, Chapter 5, Chapter 7, Chapter 9, Chapter 11, Chapter 12 and Chapter 13. Chapters 7 and 13 are the most popular bankruptcies filed by debtors.

Bankruptcy Drawbacks

The following are a few drawbacks to filing for bankruptcy:

• Credit History: Bankruptcy is one of the worst things that can happen to your credit history. It stays on your report for up to 10 years and stays in court records for 20 years. The damage it creates goes further than just your credit report; it severely limits your ability to receive a loan and employment as banks and employers typically judge you by your credit report.
• Repossession: Discharging a bankruptcy can cause you to lose valuable assets and money.
• Social status: Personal bankruptcy can ruin your social status.
• Business reputation: Businesses that file for the protection of bankruptcy stand to lose more than their reputation, they also lose all chances to grow their business. Their credit rating will deter banks from qualifying them for future business loans.
• Financial: The most serious consequence to bankruptcy is the closing of all your bank accounts, credit cards, and more. Anything you are currently buying through financing or leasing, like your car, will be returned to the owner.
• Life conditions: People who declare themselves bankrupt will find it difficult to buy a home, rent an apartment, get insurance, or buy a car. These conditions are extremely difficult in today’s world.

Because of these reasons and more, it is worth it to avoid bankruptcy for a more secure future.

Why do people file for bankruptcy?

• Unemployment: The sudden loss of a job definitely has an impact on the decision to declare bankruptcy. In order to keep a certain standard of living, people who are unemployed are more apt to accept more debt without the ability to pay it back.
• Divorce: When a couple separates or divorces, one or both parties typically tends to suffer financially. This seems to also be directly related to the rise in bankruptcy.
• Credit Cards: There is a direct correlation between the number of accounts used by an adult and the rise in the rate of filing for bankruptcy. The more cards that a person has, the more debt will be accrued.
• Debt-income ratio: This ratio is the percentage of a consumer’s monthly gross income that goes towards paying debts. As this rate rises with the general public, the filing rate for bankruptcy has also risen.

Common Myths About Bankruptcy

Bankruptcy seems like an easy way out of debt, but the reality is a lot worse than most people realize. Following is a list of common bankruptcy myths:

• You will eliminate all debt: Bankruptcy will not get rid of all your debts. There are some that cannot be discharged in bankruptcy like taxes, child support, alimony, student loans, etc.
• You will have a new beginning: Bankruptcy does not put you back at square one – it actually puts you at a negative beginning. As bankruptcy will be reflected on your credit report for 10 years, creditors will not be able to offer you credit terms – and if they do, they will cost a lot in interest.
• You can still keep some accounts out of bankruptcy: There are very strict bankruptcy laws that include stiff punishment if you try to hide or not include any accounts. The only ones you don’t have to include with filing for bankruptcy are ones that you will have paid off before you file.
• It’s easy to file for bankruptcy: Filing is extremely time consuming, as well as expensive. Recent law changes also make it much more difficult to file as well.
• Debts are removed for free: Bankruptcy makes you debt free only by liquidating your assets – which could mean losing your home, car, etc.

Is debt consolidation better than declaring bankruptcy?

Debt consolidation can actually make you debt free with more benefits. It can be a permanent solution to your burdened finances, while bankruptcy only provides temporary relief. Consolidating your debt can reduce your monthly payments by 40-60%. Your credit report will be repaired as soon as your debts are paid for – not for the next 10 years like with bankruptcy. You will also be free from the hounding of creditors. In short, bankruptcy should only be chosen when there is no other choice. Debt counselors can help with these decisions as well.

For more information on avoiding bankruptcy or if you need immediate debt relief please visit debtrelief.us.com Use the debt calculator to see how much debt you can eliminate.

Article Source: http://EzineArticles.com/?expert=Cole_Collins
http://EzineArticles.com/?The-Myths-and-Reality-of-Avoiding-Bankruptcy&id=1479141

By Alan Barnes

Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. Many people do not realize that there are five types of bankruptcy options available under the U.S. Bankruptcy Code; however, for most consumers there are really only two viable options; Chapter 7 and Chapter 13 bankruptcy.

Chapter 7, bankruptcy is entitled Liquidation: In a Chapter 7 bankruptcy, a court-supervised procedure occurs during which a court-appointed trustee collects the assets of the debtor’s estate, converts them to cash for repayment, and makes all necessary distributions to the debtor’s creditors; however this is all done within the debtor’s right to retain certain exempt property. Traditionally, there is little or no nonexempt property in a chapter 7 bankruptcy. Due to this fact, there may not be an actual liquidation of the debtor’s assets. In this case, it is called a “no-asset bankruptcy.” It is important to realize that a creditor that is trying to collect on an unsecured claim will only get a distribution from the bankruptcy estate if the case is an “asset bankruptcy” and the creditor can provide proof of their claim with the bankruptcy court. In almost all chapter 7 bankruptcies, the debtor will be grated a discharge that releases them of personal liability for most dischargeable debts. The entire process normally takes just a few months from the time the bankruptcy petition is filed.

Chapter 13, bankruptcy is entitled Adjustment of Debts of an Individual with Regular Income: A chapter 13 bankruptcy is traditionally used for people who have a regular source of income or a full-time job. For many people, chapter 13 is preferable to chapter 7 because it allows the debtor to keep some assets. A chapter 13 bankruptcy allows the debtor to repay creditors over time. This time traditionally varies from three to five years. This type of repayment proposal takes place at a confirmation hearing. During this confirmation hearing, the court will either approve or disapprove the debtor’s repayment plan. This decision largely depends on whether the repayment plan meets the Bankruptcy Code’s requirements for confirmation. In a Chapter 13 bankruptcy the debtor is usually able to remain in control of their possession and property while making payments to creditors; however, payments are made via a court trustee. Unlike chapter 7 bankruptcy, the debtor does not receive an immediate discharge of their debts. Under chapter 13 bankruptcy, the debtor must complete the repayment plan before the discharge is granted; however, the debtor is protected from lawsuits, garnishments, and other creditor action while the plan is in effect.

It is important to remain cognizant of the fact that not all debts are discharged under bankruptcy. The debts that are able to be discharged will vary under each chapter of the Bankruptcy Code. However, the most common types of non-dischargeable debts are tax claims, debts that are not presented by the debtor to the court while filing for bankruptcy, debts for spousal or child support or alimony, debts to governmental units for fines and penalties owed to government entities, debts for personal injury caused by the debtor’s operation of a motor vehicle while driving intoxicated, debts for willful and malicious injuries to person or property, debts for government funded or guaranteed educational loans, and debts for certain condominium or cooperative housing fees.

In order to file for bankruptcy, you must file a petition in federal bankruptcy court. You must file a statement of assets and liabilities as well as schedules listing of your creditors. Once you have finished filing bankruptcy, your creditors can no longer take action against you to collect discharged debts.

Negative Aspects of Bankruptcy

In chapter 13 bankruptcies, you may end up paying back 50% or more of your current debts. Additionally, if you miss a regularly scheduled payment at anytime during your chapter 13 bankruptcy repayment plan, you could end up in violation of the court and forced to repay all the debt!

One of the most difficult parts of bankruptcy is learning to live with the fact that filing bankruptcy limits your personal spending to items that the court considers absolutely necessary. In most cases, debtors do not complete their chapter 13 bankruptcy repayment plans. Most people filing chapter 13 bankruptcies think they will be able to complete their repayment plan; however, only about a third of them actually do. Additionally, chapter 7 bankruptcy may stay on your credit longer than a chapter 13 bankruptcy. This time ranges from 7-10 years for most people. Many people do not realize that if you own a home with a sizable amount of equity, have a fair amount of assets to protect, or have co-signers on a loan, you most likely will not be able to file chapter 7 bankruptcy under current law. Now that the new bankruptcy legislation has passed, it will be even more difficult to file for bankruptcy.

Many people think that filing bankruptcy is the silver bullet that will fix all of their debt and credit related problems; however, filing bankruptcy is the worst thing you can do to your credit. Most lending institutions will consider your bankruptcy when evaluating you for a personal loan even after the bankruptcy has expired. Qualifying for a loan after filing for bankruptcy can be very difficult and could cost you considerably more than a person that has not filed for bankruptcy.

It is understood that some situations will require you to file for bankruptcy. However, you should avoid bankruptcy if at all possible. A good debt settlement company can help eliminate most, if not all, of your unsecured debt so that you do not have to file for bankruptcy. If you require additional information on the subject of bankruptcy you may want to contact a bankruptcy attorney in your area.

Alan Barnes IAPDA Certified Debt Arbitrator President and CEO of Debt Regret http://www.debtregret.com

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http://EzineArticles.com/?Bankruptcy:-What-You-Need-to-Know&id=34443