There are more than one type of procedures of bankruptcy - in fact five different types. The most common procedures are known as Chapter 7 and Chapter 13. Usually, when people speak of "declaring bankruptcy," they refer to Chapter 7, which is the procedure that gives you the chance to erase everything, avoiding almost all debts without having to make further payments in the future.
Naturally, there are strict limits on how often can a person apply the procedures in Chapter 7. Chapter 13 is a different kind of arrangement. It can consolidate your debts and stop all or part of them while protecting you from being disturbed by your creditors. It's often an excellent alternative when the Council of Consumer Credit or Chapter 7 are not available options.
Will bankruptcy help me in my situation?
Bankruptcy can give you a fresh start and often may seem very attractive to people in huge debt. However, the process is not for everyone. Declaring bankruptcy can affect your credit years or have serious consequences you will need considered.
Some factors to consider:
What is the totality of my living expenses?
Calculate all your monthly expenses such as food, shelter, utilities, transportation, insurance, medical care and a reasonable reserve the need for an accurate list. Also make a list of monthly income.
Who owe you money?
List your creditors. Identify all those credits with has committed a property, the value of property on which creditors have a interest and monthly payments due to each creditor today. Are you a "proof decree? If you only has some belongings that are not worth a lot... If your only income is unemployment insurance, SSI or some other government benefit... or if you work and their wages are very low, you could be truly "safe Order" The effect of being a" test decree is that creditors do not bother to sue, because they can not "meet" its decrees against his, the creditors can not take any wages or seize property of a person who is truly "safe decree."
If your debts were erased, would this finish your financial problems? Bankruptcy will give you a fresh start and will work best if you have after the failure to keep adequate pay and pay any new debt. On other hand, Bankruptcy is only a temporary "solution" if you fall again in debt without any way to pay new debts. Chapter 7 is only available once every six years. usually best to wait until you reach the end of its financial problems before to declare bankruptcy. (If you owe $ 5,000 now but think you will owe $ 6,000 in six months then it is advisable to wait.)
Bankruptcy does not release all the debts
It is important to know that "going bankrupt" does not necessarily qualify, the failure to pay all types of debts. For public policy reasons, several types of debts are particularly excluded from being released by a common bankruptcy debt. Some kind of debt can not be deleted and they are the obligations, such as child support, marital pension and criminal restitution tickets. Some other types of debt are downloadable in some circumstances but not in others, for example, Student loans are sometimes but rarely deleted, and if deleted, does not happen automatically. The details of your particular situation should be discussed with a lawyer or other experienced person, before starting procedures bankruptcy.
What will happen to my credit?
A bankruptcy case shall be reported by agencies credit report for 10 years. Creditors
are sometimes willing to approve loans after a bankruptcy because they know it financial burden has taken off and now you can make your payments regularly. Also, they know that if you filed a single settlement under Chapter 7, you can not declare bankruptcy under Chapter 7 again for six years more, so that somehow you would be a better credit risk. If you have completed a plan under chapter 13, then you have proved it can handle some debt obligations.
However, it is true that Some creditors require a period of time between bankruptcy and the granting of more credit. This is certainly a reason to be cautious about to file in bankruptcy, but nowadays you also can access to a loan for bankruptcy people.