Bankruptcy

Personal bankruptcy as a debt management tool is a last resort. The results of declaring bankruptcy are long term and can have a profound impact on an individual's financial future. Bankruptcies remain on an individual's credit history for a period of ten years and can greatly affect the ability to qualify for credit and loans. As well, a bankruptcy on a credit history can affect job applications, housing applications and other import details of an individual's life and well being.

If you are considering filing for bankruptcy, or have filed in the past, professional credit and debt solutions can help you get your credit back! Fill out a free online credit evaluation or consider professional credit repair services before you file.

Bankruptcy is a legal procedure. For those applying for bankruptcy in order to get a fresh financial start, a discharge is what they seek. This discharge is when a court decides that an individual isn't obligated to repay certain debts they owe.

There are two types of personal bankruptcy, both of which must be filed in federal bankruptcy court. They are Chapter 13 bankruptcy and Chapter 7 bankruptcy. Bankruptcy costs include a bankruptcy filing fee of $130 and an administrative fee of $30 for a total cost of $160. Legal and attorney fees are not included in that amount, and can vary greatly.

Chapter 13 Bankruptcy

This type of bankruptcy applies to those who make a regular income and carry a limited amount of dept. This type of bankruptcy protection enables an individual to keep their property, whether that be a car or mortgaged house, that in other bankruptcy proceedings, may be lost. The Court approves a repayment plan that enables an individual to keep their property, while paying off a default over a typical period of 3 to 5 years.

Chapter 7 Bankruptcy

Also called ‘straight bankruptcy’, Chapter 7 bankruptcy refers to the process of liquidation of all assets that do not fall under the category of exception. The exceptions can include automobiles, property required for work and household furnishings. Often, some property is sold through a court appointed trustee or official and the funds then given to creditors. Only once every six years is an individual able to receive a discharge of debts under Chapter 7 Bankruptcy.

Both types of bankruptcy offer certain exemptions enabling an individual to keep particular assets. These exemption amounts and details vary. It is important to note that certain things are almost never exempted after filing personal bankruptcy. These include alimony payments, child support, taxes, fines and certain student loans. In Chapter 13 bankruptcy, an acceptable payment plan to catch up on debt repayments is required to keep any property on which a creditor has a lien or unpaid mortgage.

Although both types of bankruptcy enable a person to stop foreclosures, garnishments, repossessions and rid themselves of unsecured debt, declaring bankruptcy has a severe impact on your credit history for a period of 10 years and should only be considered as a last resort.

The experts all agree - don't file bankruptcy without first assessing your other options. Seek advice from professional paralegals or lawyers to assess alternative credit and debt solutions.