Making Good Sense Out of Filing for Bankruptcy
Several people run into credit problems at different points in their lifetime due to a number of debt settlement cases or outstanding credit debt. Some companies have made it their main advertisement campaign tactic to present the consumer with the option of bankruptcy as being completely detrimental to their credit standing and insurmountable post-filing.
Most reasons for personal bankruptcy cases revolve around one main issue, medical bill debt. Over 40% of all cases filed predating 2001 were a result of a person not having insurance to cover part of their medical bills. This number continues to rise and has seen an increase of 20%, plus, since a statistical analysis in 2001.
Credit cards do a number on the consumer’s finances with ever increasing, uncapped interest rates. Most credit card companies post normal interest rates in the 10-15% range and immediately increase the charges to 25-30% ranges when a payment isn’t paid in full or gets missed. You can imagine how someone finds ever, increasing debt pilling up in the face of doubled interest payments, stacking medical bills and normal living expenses.
Bankruptcy laws have seen a number of changes over the past few years but consumers will not see an end to their credit viability after meeting the requirements to file and doing so, unlike widespread thoughts on the matter. Consider a few things regarding filing for bankruptcy throughout the following bullet points:
1. Chapter 7 bankruptcy applies the discharges to most debts, but not all. Most unsecured debts will not discharge under the filing of Chapter 7 bankruptcy. These accounts include but aren’t limited to: alimony charges, child support, unsecured debt on the scale of student loans or cars, and owed tax.
2. Each state regulates the guidelines included in filing for each type of bankruptcy. Some states allow the person filing for bankruptcy to keep a certain amount of personal assets, while rendering court ordered repayment terms, if the person still makes a certain amount of income.
3. A person filing for bankruptcy must account for all debt charges pending against them in detailed documentation. You might want to pay back certain accounts instead of allowing them to be charged under bankruptcy but you still must disclose the account during the initial stages of filing. You’ll need to bring up the matter with your attorney in order to progress to reaffirmation agreement portions of filing for bankruptcy. Make sure you will be able to complete all terms outlined in the negotiation process.
4. Although it isn’t really difficult to file for bankruptcy because the forms include all clauses involved, you should hire a bankruptcy attorney to guide you in the steps along the way and provide representation in court matters.
5. Filing for bankruptcy doesn’t mean you’ve taken the easy or lazy road out of debt matters. A lot of people file for several different reasons, such as divorce, death in the family, sudden illness, loss of employment and other life’s less than pleasurable experiences. Bankruptcy is there for a reason and the statistics show most people need bankruptcy protection, especially when only 3% of those who file out of 600k applicants get turned away because they don’t meet certain requirements.
6. Never drag the rest of your credit standing down with you in the face of filing for bankruptcy. Do not max out your credit cards just before you file. You’ll want to hire a bankruptcy attorney to advise you on these matters because purchases made within a certain time period pre-dating the filing for bankruptcy will not be discharged and you will have to pay them back or have the item repossessed.
7. Make sure you’ve looked into other ways of discharging debt before turning to bankruptcy. Although bankruptcy doesn’t end your financial life, it should be the last place to turn to for debt relief.
Debt consolidation loans and debt settlement negotiations present as the best option pre-dating thoughts of filing for bankruptcy. Lots of people have personal assets on secured home loans, or other loan terms and do not want to risk losing their valuable property. Make sure to undergo credit counseling in either circumstance because you’ll need help in identifying ways to steer clear of what got you into financial trouble in the first place. Otherwise, you may wind up filing for bankruptcy a second time around and if it’s the last resort the first time around, you can imagine the financial repercussions on a second case-filing basis.
Tags: Bankruptcy Tips, filing for bankruptcy