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Filing Personal Bankruptcy – Weighing the Pros and Cons

February 13, 2010 By admin Leave a Comment

Bankruptcy is seen as many different things for many different people. Some see it as complete financial failure, some see it as unethical, some see it as the answer to their financial problems. But I imagine that very few people consider filing personal bankruptcy to be the first step on the road to repairing your credit.

Well let's take a look at just how that is the case. If you have reached a stage where you are filing personal bankruptcy, then there is a high probability that you are in need of a financial fresh start. Whether as a result of your own personal finance mismanagement, inability to control your spending or whether the result of an unforeseen medical emergency bill, you probably already have dents in your credit rating from trying to deal with the cash flow problems.

Chapter 7 bankruptcy wipes out most of your debts. Of course, filing personal bankruptcy has a detrimental effect on your credit and remains there on record for ten years!

This does, of course, mean that you are going to have massive difficulty in obtaining credit. However, this does not necessarily mean that you will definitely not be able to obtain credit. Some companies actually actively target those who have successfully filed chapter 7 because these people often have no other financial commitments (and have often learned their lessons)! While your interest rates will be high for the first couple of years, you also have the opportunity here, with a clean slate to take credit (manageable amounts only) and make regular repayments on time, thus repairing your credit rating. So from this perspective, it can be a real silver lining to an otherwise dire situation, and offer you the ability in some ways to essentially start again. The importance of this cannot be underrated.

Want to know how to manage your debt without losing control? Get the right information on Filing Personal Bankruptcy before you make the important decision. To get the facts on bankruptcy, simply Click Here

Find out more about declaring yourself bankrupt and what are the considerations you should take note of.

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Declaring Personal Bankruptcy – What Are the Pros and Cons of Filing For Bankruptcy?

February 12, 2010 By admin Leave a Comment

Declaring personal bankruptcy brings relief to those who have been in a situation where they are unable to meet payments and have creditors on their back all the time. For some people, it truly is the only possible way out of a dire financial situation. But it does have drawbacks as well and these should be considered before you decide you are definitely declaring personal bankruptcy.

First of all, declaring personal bankruptcy will leave you with a tarnished credit record. Your bankruptcy will show on file for ten years and you may find it almost impossible to obtain credit. And even in situations where you are able to get credit, you will find that the interest rate you are offered, as someone deemed a high risk borrower, is very high. While you can indeed build positive credit back up, you should bear in mind that the first couple of years following your bankruptcy in particular could be incredibly difficult for you.

You should also consider the fact that bankruptcy, even chapter 7 bankruptcy, does not eradicate all types of debt. In particular, you will find that almost invariably, student loans, alimony, outstanding taxes, child support and criminal fines will remain outstanding even after bankruptcy. If this type of debt makes up the bulk of what you owe, then there is a real possibility that bankruptcy would have very limited benefit for you.

You should also bear in mind that your possessions and assets may be at risk. Of course, most people who reach the stage of declaring personal bankruptcy have very little in the way of high value possessions and assets, but you should be aware that they could be seized in contribution to repaying what you owe. Bear in mind too that you are not guaranteed that your home is safe. It's most probably exempt from being seized but check with a lawyer. This will depend on the homestead exemption in your particular state and on the value of your home.

Want to know how to manage your debt without losing control? Get the right information on Declaring Personal Bankruptcy before you make the important decision. To get the facts on bankruptcy, simply Click Here

Find out more about declaring yourself bankrupt and what are the considerations you should take note of.

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What is Chapter 13 bankruptcy and what are its pros and cons?

February 9, 2010 By admin Leave a Comment

Filing Chapter 13 bankruptcy can benefit you if you have failed in all your attempts to get rid of your outstanding debt. With the help of Chapter 13, you can avoid foreclosure and also repay some or all of your debts over a specific time period; it usually takes 3

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Bankruptcy Information- The Pros And Cons Of Chapter 7 Bankruptcy

February 8, 2010 By admin Leave a Comment

Chapter 7 is the most common type of bankruptcy, and is sometimes referred to as liquidation bankruptcy or straight bankruptcy. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships. Chapter 7 is one way for you to begin reestablishing your credit by eliminating the bulk, if not all, of your unsecured debt dramatically reducing your debt to income ratio.


Creditworthiness and the likelihood of receiving a Chapter 7 discharge are only a few of many issues to be considered in determining whether to file bankruptcy. Chapter 7 is used most often by people who are unemployed or very deeply in debt due to medical expenses or unexpected financial circumstances.


The process for a Chapter 7 bankruptcy is relatively easy. After a meeting with a bankruptcy attorney to discuss your financial situation, a bankruptcy filing may be recommended. In the case of a Chapter 7 filing, you will need to attend a creditors meeting, which generally takes place 30 days after the filing of the bankruptcy petition.


Creditors, who you have debt with, may appear and ask questions regarding the debtor's financial affairs and property, but creditors rarely attend. Creditors, by law, are no longer permitted to initiate or continue their lawsuits, wage garnishments, attachments or other collection activity. This activity includes telephone calls from collection agencies demanding payment. Attorney's fees for Chapter7 filings vary depending upon the complexity of the case, but generally hover around the $700 to $800 range.


In determining what debts will be discharged, or forgiven, by the courts there are certain types that can not be waived in a Chapter 7 bankruptcy filing. Debts for most taxes are not cancelled. Debts for educational benefits and student loans are not discharged unless a court finds that not discharging the debt would impose an undue hardship on the debtor and his or her dependents. Debts or obligations under a divorce or support decree are not usually cancelled, and debts due to fraud, dishonesty or misconduct are not cancelled.


Debts that you incurred a result of an intentional or even negligent misrepresentation on your part are not dischargeable in Chapter 7. Certain debts that the courts deem questionable may also be outside the scope of debt discharged. Debts owed to a single creditor totaling more than $500 for luxury goods will not be discharged if acquired up to 90 days prior to filing. Cash advances of $750 acquired within 70 days will also not be discharged.


Property is one of the biggest areas of concern for those considering bankruptcy. Consulting your attorney will make it clear whether or not your property is at risk when you file Chapter 7 bankruptcy. Sometimes property can be taken by the bankruptcy official (trustee) and sold to pay on your debts. Property or asset exemptions are determined based upon your situation, income and the laws of your state.


Chapter 7 is a complete and total liquidation of a debtor's assets in order to pay off their creditors. Chapter 7 is designed as an orderly, court-supervised procedure by which a trustee collects the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors, such as mortgage companies and auto lenders.


Chapter 7 may be your best option however, if you are not eligible for Chapter 7 bankruptcy or if Chapter 7 will not meet your specific needs and goals, Chapter 13 bankruptcy is a useful alternative. Chapter 7 may not be available to debtors who have enough income exceeding their basic living expenses. For those who are deemed to have an excess of disposable income, the court will determine that they can afford to repay a portion of their debts through a Chapter 13 payment plan.

BetterCreditSecrets is a resource site for those considering chapter 7 bankruptcy or need bankruptcy information. Visit us or check out our article directory for free article distribution.

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Weigh The Pros And Cons Before Declaring Bankruptcy

February 8, 2010 By admin Leave a Comment

Bankruptcy occurs when a process is initiated whereby a debtor obtains court ordered relief from having to pay off his or her debts. It can be of great use in certain cases, but is not advisable for use by everyone that faces financial difficulties. In fact, there is no easy and quick answer to the question of whether to declare bankruptcy or not. It needs discussing with a credit counselor or a bankruptcy attorney who is best able to evaluate the costs as well as benefits of bankruptcy in a person's individual financial situation.

The Type of Debt Can Influence the Ultimate Decision

Before one declares bankruptcy, the type of debt owed should be taken into consideration as it plays a significant role as do other factors that can influence the decision of whether to declare bankruptcy or not. There are certain initial considerations that can affect the final decision as well as the form of bankruptcy that a person chooses.

Some important initial considerations that can affect the decision whether to declare bankruptcy or not include whether the debts are dischargeable or not in bankruptcy, whether to keep part or all of the debt, relative costs as well as benefits of bankruptcy as also the financial future following bankruptcy. Also, one need to consider what effect declaring bankruptcy can have on one's employment as well as prospective employment, and how credit records will affect one's ability to rent or purchase a residence.

Sometimes, filing for bankruptcy may not provide relief and it would require advice from a lawyer or credit counselor to see whether or not one qualifies for discharge. Also, one may not want all of the debts to be resolved through bankruptcy, and if one regards certain personal items (such as cars) to be indispensable, choosing an option other than bankruptcy would be more advisable.

Declaring bankruptcy may not just wipe away everything from the slate and give a person the right to start all over again with a clean sheet. Debts need to be paid at least in part and one can also run the risk of having some personal property used to satisfy debt. Also, bankruptcy gets to be placed on one's credit record and may remain so for seven to ten years.

All said and done, before one declares bankruptcy, one should weight the pros and cons as well as decide on which form of bankruptcy to choose. However, because of the nature of personal bankruptcy, many bankruptcy lawyers will offer their services on a voluntary basis, though for simple bankruptcies, a fixed fee may be charged for the entire case.

Simon Peters is the owner of On Bankruptcy, it is THE best source for advice on the subject on bankruptcy, nothing to sell, just information . . .

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