Filing Bankruptcy – Should I Declare Bankruptcy?
Author: Mike Singh
Sometimes people consider bankruptcy to be an easy option to free themselves from the burden of mounting debt. In fact, rather than addressing the root of the problem this the first option that comes to their mind. The truth is that this may eliminate the burden but its not an easy thing to do. Furthermore, bankruptcy should always be your last option.
At first glance it may seem that the filing process for bankruptcy is very easy. But, its not that trivial. The justification for your filing will begin with showing your financial history to a judge and it will also be open to any objections that your creditors might have. More than likely, your creditors will fight tooth and nail to get their money back rather than willing to settle.
In the event that you actually are able to file bankruptcy successfully, you should consider the effects of this action on your future.
Credit cards with any balances outstanding will be lost while some other creditors will close your accounts. Getting a large credit line or a home loan at an affordable interest rate will be near impossible.
You will still owe debts such as taxes owed from the past 3 years, student loans, and any others which are exempt from bankruptcy protection.
How long will this last you ask? Ten years! During these ten years, you will have to maintain a spotless credit history to get a level where creditors can trust you to a certain degree. On your credit history, the bankruptcy will stand out as the most negative criterion. This is much worse than a low FICO score.
These are the effects of your credit. Besides these, you could have to give up any other assets depending on when you got them. You will not lose your house and your car in most states. However, if you have additional vehicles or real estate these might not be protected.
Don’t forget that this procedure of filing bankruptcy is not free. There will be costs associated with the courts and of course your attorney is also going to charge you. These costs will only compound your financial misery.
All is not lost. You will be able to obtain some breathing room to start the recovery process of your financial situation. Your debt collectors will stop bothering you. If they don’t notify them of your filing. Any actions of foreclosing your house will stop. If you are contemplating filing bankruptcy, you will be better off by filing sooner than if its too late. The sooner you file, the sooner you will be on your way to rebuilding your credit history (perhaps better than the one you built last time around).
Now that you won’t have credit cards this might be a blessing in disguise. You will have another opportunity to change your spending habits.
Do your due diligence before you take the big step. Good luck!
Article Source: http://www.articlesbase.com/non-fiction-articles/filing-bankruptcy-should-i-declare-bankruptcy-125602.html
About the Author
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Filing bankruptcy?
Only serious answers please. I’m about to file for bankruptcy and I was curious to find out if anyone had a positive result for doing so?
How will filing bankruptcy affect my ability to get health insurance?
My financial situation is such that I may need to file bankruptcy. I am starting a new job and as it is a small company I may need to get health insurance on my own instead of through the company and the employer will reimburse me for a portion. I am wondering how filing Chapter 7 Bankruptcy will affect this, if at all. Any assistance would be VERY helpful. Thank you!
Filing Bankruptcy?
I have always wondered what the cons when filing for bankruptcy were. And is it common to do this? Just a curiosity. Thanks!
filing bankruptcy?
I’ve been thinking about filing bankruptcy but I’ve been told that we make too much money to file. Is there any truth to that?
When filing bankruptcy in CA, is it OK to make big purchases?
My friend is planning on filing bankruptcy and she wanted to make big purchases using her credit card prior to filing. How safe is it? What are the contingencies?
please… objective responses only. thank you.
I would suggest you read the article “New Bankruptcy Law – Where’s The Consumer Protection?” you can view it at:
http://www.sandiegolawyerforyou.com/san-diego-bankruptcy-law-update.htm
http://www.las-vegas-nevada-lawyer-attorney-legal-injury-defense-directory.com/las-vegas-bankruptcy-lawyers.htm
http://www.san-francisco-oakland-bay-area-lawyers-attorneys-directory.com
http://www.san-jose-ca-lawyers-attorneys-directory.com
http://www.sacramento-ca-lawyers-attorneys-directory.com
http://www.la-orange-county-lawyers-attorney-directory.com
http://legal-advice-library.info/blog
http://www.austin-texas-lawyers-attorneys-directory.com/austin-legal-services.htm
http://www.san-antonio-texas-lawyers-attorneys-directory.com
http://www.brokerforyou.com/san-diego-real-estate-sales.html
Filing for bankruptcy should never be an easy option. While it is true that if you make “too much” money, you will be steered from Chapter 7 to a Chapter 13, you can never really make too much money.
To determine what chapter you will need to file, your attorney will do a “means test.” The means test takes your household income, size, state poverty guidelines, and expenses into consideration. I have had clients who have been able to “pass” the means test and go into Chapter 7 even though they were high income. I’ve also had lower income clients who failed the means test and had to file Chapter 13.
I would advise you to contact some of the attorneys in your state. Most reputable bankruptcy attorneys will offer a free consultation to determine whether or not bankruptcy protection can benefit you – and exactly what kind of protection it can offer.
Best of luck!
there are a lot of cons to filing but it depends on what chapter….
Bush changed the laws so it’s not easy to file anymore…you have to be counseled, get a certificate (which you pay for)..then you have to retain a lawyer to file for you.
you will have a very hard time getting credit, if you can get any at all for years and are stuck with the car you drive…..it is also difficult finding a decent place to rent or in some cases jobs….(any government agency will do a background check…see your bankruptcy and think you are unfit….even though you more than likely are not)
no there is a different criteria on policies like health and life
It means the judge at the bankruptcy court is going to be a lot harder on her. And the court will likely not discharge any debts run up since about 6 months before the filing.
That is, she will have to pay for those items anyway and the amount she has to still pay on the old debts will be a lot higher. Someday she will be very sorry she made those purchases.