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July 22, 2010 By admin 10 Comments

Filing Bankruptcy - The Downside to Filing Bankruptcy

Depending on your current financial situation, bankruptcy might seem like the only answer. While in many cases this may be true, there are other solutions which might prove to be the better choice.

The biggest downside to bankruptcy is the fact that it remains on your credit report for up to 10 years. During this time it will be much more difficult for you to establish a positive credit history. Many credit applications ask if you've ever filed bankruptcy, so even if the 10 years have passed and it's not on your official credit report, you have to answer yes.

While your credit report will drop the bankruptcy after 10 years, the federal court has it on record forever. Those records are open to the public.

Your credit report can be checked when you apply for employment so a bankruptcy can affect your ability to get a job in some industries. Car insurance companies look at your credit score as a measure of reliability. A bankruptcy is looked at unfavorably and can result in denial of insurance, or insurance only provided at very high rates. When moving, it can even be the deciding factor in whether or not you live in the residence of your choosing. Many apartment leasing companies won't approve a lease to a person with a history of bankruptcy, even if they have the financial ability to now make the lease payments.

Another downside to bankruptcy is the cost. Recent changes in bankruptcy laws have initiated a huge increase in filing fees. While it's possible to file a bankruptcy without an attorney it's not recommended in complicated cases. Certain debts such as student loans and back child support can not be erased. Add the filing fees to the cost of retaining a bankruptcy attorney and you are talking about fees probably in excess of 00.

If you have equity in your home you may not be able to retain it but be forced to sell the home to pay off debts. While your debts may be high, if you have substantial assets it may be financially advisable to not declare bankruptcy.

One of the conditions of the 2005 changes in bankruptcy law now requires individuals to seek credit counseling prior to filing. If at all possible, you should consider using a credit counseling agency or even a debt consolidation service before deciding to go bankrupt. The credit counseling service must be government approved to satisfy this requirement.

Other changes require that if you can pay at least 0 per month towards debt payment you must file Chapter 13 instead of Chapter 7. Chapter 7 means all your debts (with the exception of back child support, taxes, and a few others) are forgiven and you come away with a clean slate. Chapter 13 requires that you come up with a strict repayment schedule based on your income and assets to pay off as much of your debts as possible within a 5 year period.

You will find yourself on the road to good credit much sooner, if you can utilize a method other than bankruptcy to help you get out of debt.

Article Source: http://www.articlesbase.com/finance-articles/filing-bankruptcy-the-downside-to-filing-bankruptcy-576361.html

About the Author
Corey Landis contributes to several websites including Credit Card and Debt Management and Loans as well as Ways to Find Money

Filed Under: Bankruptcy information Tagged With: bankrupt, bankruptcy, file, Filing

Bankruptcy Filings

July 2, 2010 By admin 9 Comments

Bankruptcy Filings - 2008

Author: Ryan Tenney

According to some recent stats, both personal & corporate bankruptcy filings increased from 2007 to 2008. Bankruptcies seem to be rising in many states & some people think that the numbers will only continue to rise in the immediate future...

In fact, in 2008, the number of bankruptcy filings is expected to exceed 1 Million! One of the more common reasons that some people file for bankruptcy are large medical bills that can't be easily paid back. Another common reason is the loss of a job. And finally, unsecured debt, like credit card debt, can get very large, very quickly, if not properly managed.

Furthermore, as many consumers have recently discovered, debt levels become unmanageable when they are the result of large increases in fixed expenses. If more money goes out than comes in every month, debt levels can become difficult to manage.

For instance, imagine a hypothetical consumer who signed up for an adjustable rate mortgage in 2005. If that consumer's mortgage payment was originally 00 per month & it readjusts to 00 per month, where will the 00 difference be made up? If that particular consumer doesn't get a substantial raise to cover the difference, how can the increased amount be paid every month? The extra 00/month has to come from somewhere....With current U.S. savings rate at 0%, is it realistic to think that people will be able to come up with the extra amount every month?

During the 1990s, some banks started extending generous credit lines to consumers through credit cards. Credit was easy to get & consumers used credit cards to purchase just about everything imaginable. The added reward points & bonus' made credit cards very convenient for a lot of consumers. Credit cards can make life easier for a lot of consumers because they make it easy to manage and track expenses.

However, as stated above, principal amounts & fees can compound very quickly if they are not paid off.

Nationwide, courts are seeing double digit increases in the number of people filing for bankruptcy protection. And, not surprisingly, bankruptcy filings are reported to have increased substantially in many states that experienced both the "housing bubble" & the resulting wave of foreclosures...Arizona, California, Florida & Nevada are four states that have seen double digit increases in the number of bankruptcy filings from 2007 to 2008.

Furthermore, according to some statistics, while some costs have increased recently, incomes have not kept up with increased expenses. Especially energy costs. Take a look at the latest gas or power rates. According to the latest BLS.gov CPI stats, energy costs have been increasing more than 15% per year for the last 6 years at least! Have incomes increased enough to match the increased expenses?

Probably not.

So, are expenses that over run incomes the reason why so many more people are filing for bankruptcy protection? These are not easy questions to answer today, given the apparent contradictions in both inflation and deflation, not to mention many other factors that aren't easily identifiable.

However, more people are apparently filing for bankruptcy protection & some experts think that the trend may continue.

Article Source: http://www.articlesbase.com/finance-articles/bankruptcy-filings-2008-541928.html

About the Author
Get 100% live bankruptcy news & information, click here: http://www.bankruptcyaccess.com.

Filed Under: Bankruptcy information Tagged With: 13, 7, bankrupt, bankruptcy, Chapter, debt, file

How To File For Chapter 7 Or 13 Bankruptcy

March 20, 2010 By admin Leave a Comment

Filing bankruptcy is the last draw if you can't find any other solution to your financial and debt problems. This serious step keeps you protected from your creditors but you have to go through a lot of trouble for the proceedings. Federal bankruptcy law oversees the procedure, however, recent changes to the law have made filing bankruptcy more difficult.

The first thing bankruptcy law requires is that you contact a bankruptcy lawyer. A bankruptcy lawyer can be found through local and state bar associations (for referrals) or you can ask around for an attorney you can trust to do a good job. The next step is to collect all your financial papers and bring them to your bankruptcy lawyer's office. Don't forget to bring outstanding bills, bank statements, and paycheck stubs from the last six months, mortgage and car loan information, as well as tax returns.

All the paperwork that your bankruptcy lawyer will put together when filing bankruptcy is called a petition. The petition, according to bankruptcy law, must list every debt you currently owe. In the case that you purposefully leave out creditors, the court has the right to dismiss your case entirely, and you won't be given a chance to file for bankruptcy at all. This is a federal crime under bankruptcy law as well - never lie when filing bankruptcy.

Talk to your bankruptcy attorney about all the debts you have, both secured and unsecured, and ask whether or not some of your debts will still be around after bankruptcy has been filed. If they are all discharged you won't have to pay any of them after bankruptcy proceedings. Taxes, student loans, and child support are all payments it's extremely difficult to have discharged.

Be honest with your bankruptcy attorney about all the income you have been able to earn over the past 6 months, even if from a source other than your regular job and paycheck. This is another form of information that the law requires you include when filing for bankruptcy, so disclose all finances fully.

Find out if you should file a chapter 7 - this will depend on the type of debt you have, and the amount. A chapter 7 is also known as liquidation bankruptcy. If you don't fit under this category, you'll probably have to file a chapter 13 instead. A chapter 13 bankruptcy is referred to as an adjustment of debts petition. This option applies if you make a decent living and have fallen behind on secured debts, such as house payments, as this type of bankruptcy gives you a chance to catch up on the payments you owe.

Once all the paperwork has been compiled and everything has been checked over with a fine toothed comb, it's time to sign the petition in the appropriate places as a way of stating that the information you have provided is true. Nowadays you can file a petition online, which is very convenient, with your local district. Without an attorney the process can be daunting, and you have to do it in person or through U.S. Mail.

To learn more about filing bankruptcy, check out the Bankruptcy Web Site.Bankruptcy Web Site

Filed Under: Bankruptcy information Tagged With: bankruptcy, Chapter, file

The Way to File Bankruptcy/insolvency

March 14, 2010 By admin Leave a Comment

Applying for insolvency in the UK can be a scary experience but not an impossible task. For filing bankruptcy individual just need to do your homework properly.

Filed Under: Bankruptcy information Tagged With: Bankruptcy/insolvency, file

Shall I File for Bankruptcy

March 10, 2010 By admin Leave a Comment

Many people are not sure if they should file bankruptcy or allow a foreclosure. This is not a decision which can be made easily, and is really not a straightforward case. A mortgage lender will file a foreclosure action when it is not paid its monthly mortgage payments. The only way to stop this from occurring is to pay the mortgage lender.

Understandably, most people do not want to have their car repossessed, so they make their car payments on time every month. If a person does not make their mortgage payments, they face the loss of their home through foreclosure.

Bankruptcy is a legal action filed by someone who cannot pay his debts. This action stops all civil proceedings against the debtor while the debtor is in bankruptcy. As a result, the mortgage lender is incapable of immediately continuing their foreclosure, or any other legal action. On the other hand, a mortgage lender can get around this by filing for a relief from automatic stay and proceeding with their action once the stay has been granted. Essentially, bankruptcy will not stop foreclosure, and will not allow anyone to keep a home without paying the lender. Slowing down the legal process is all that bankruptcy can achieve.

Occasionally, however, foreclosure is prevented through bankruptcy, as the latter gives person additional time in which to pay the lender and usually makes the paying easier. Bankruptcy makes a mortgage lender pause in their foreclosure efforts, and a debtor has a little extra time to raise the money.

Through bankruptcy, many unsecured debts are eliminated completely, and a person who is in debt will frequently find that they have money to pay their mortgage payments with that they didn't before bankruptcy. A chapter 13 bankruptcy allows the debtor to pay the mortgage over a period of time through a court ordered payment plan.

However, not everyone qualifies for filing of bankruptcy in the first place, and those that do must pay sufficient legal fees. Legal bills can be quite high, and high enough that they outweigh the costs of catching up with the mortgage. Anyone considering bankruptcy to prevent foreclosure should discuss it with a lawyer. No one should attempt a complicated legal process like bankruptcy without legal aide. This article is only intended to give general information, so for more detailed information, contact a lawyer in your state.

A bankruptcy lawyer is there to represent and protect his client during the bankruptcy process which can be an extremely stressful time for many people. As the changes in the law have meant that filing for bankruptcy is now more time consuming, it means that a number of people have found themselves struggling with the process. Although the amendments to the bankruptcy law are designed to eliminate the time wasters, no other real changes have been made.

Some States also have additions to the federal code but your bankruptcy lawyer will be able to inform you about these and how they will affect your bankruptcy period. The Insolvency law is designed to protect certain things like your house and car. Very soon after you have filed for bankruptcy, you will begin to get credit offers and you will want to exercise great caution in deciding which offers to accept, and when to accept.

You will notice within a short period of time after your bankruptcy has been filed that applications for credit are already forthcoming.. What this means is that within a relatively short space of time after you become bankrupt you will start receiving credit applications but at this stage you must be very careful. This is the reason why not long after you have been made bankrupt, a whole host of companies offering credit will start contacting you, but you must be very careful at this time.

To prove this point, your lawyer should warn you about certain financial companies that contact bankrupt people and offer credit. Extreme caution is required here.

It is not because the individual is a failure looking for an easy way out of his debts as the credit companies would like you to believe. Bankruptcy is generally seen as a last resort, but as legislation continues to add changes, it will become harder for individuals to apply for bankruptcy. While there are obviously some people that want to take advantage of the bankruptcy protection system, your bankruptcy lawyer will assure you that you are just a victim of bad luck who is being given a second chance.

Find out more about bankruptcy alternative, bankruptcy lawyer and more at bankruptcy-foreclosure site or visit http://www.bankruptcy.foreclosure-review.info/

Filed Under: Bankruptcy information Tagged With: bankruptcy, file, Shall