Filing bankruptcy is a financial decision that allows you to discharge most of the debts you can't repay now, or in the foreseeable future. A Chapter 7 personal bankruptcy discharges only your personal liability for debts such as:
1) Credit card bills.
2) Lawsuit judgments.
3) Medical bills.
4) Unsecured business debts owed by a sole proprietor (such as debts to suppliers, consultants,
accountants or architects).
5) Obligations under leases and contracts entered into by a sole proprietor (including commercial and residential property leases and leases to rent equipment).
6) Personal loans and promissory notes.
However some types of debt will remain intact after a Chapter 7 personal bankruptcy, which means you'll still owe them when your case is over -- just as if you hadn't filed for bankruptcy. Some common types of debt that aren't discharged are:
1) Back child support, alimony, and other domestic support obligations.
2) Court-imposed fines, penalties, and restitution.
3) Certain tax debts -- including recent back taxes, any back taxes for which you didn't file a tax return, trust fund taxes (the employee's portion of Social Security and Medicare taxes), and debts you took on to pay nondischargeable taxes (for example, if you took a cash advance on your credit card to pay your most recent tax bill).
4) Debts of more than $650 to any one creditor for luxuries in the 90 days before you filed.
5) Cash advances of more than $925 taken within 70 days before you filed.
6) Loans you owe to your pension plan -- such as money you borrowed from your 401(k).
7) Student loans, unless repaying them would constitute an extreme hardship.
8) Debts arising from your own fraudulent activity (for example, lying on a loan application), if the creditor can in fact, prove the fraud to the bankruptcy court.
9) Debts resulting from an incident in which you kill or injure someone while you're driving under the influence (DUI).
If you decide against filing for bankruptcy, you might consider debt consolidation or negotiating with your creditors. However, if after taking a careful evaluation of your entire financial situation, you firmly believe declaring bankruptcy is the most appropriate option for you, you must take the necessary steps to make this financial process work for you in the best possible way. Seek the advice and counsel of a financial professional who will assist you in accomplishing this.
It's important to understand as much as you can about bankruptcy. There are numerous resources available to you online (such as forums, websites and blogs) and offline (such as your local library) for you to learn everything you need to know about the entire process.
For example, if you're filing individually, you should file a Chapter 7 or a Chapter 13 bankruptcy. But you'll need to determine which one would be the most appropriate for your particular situation. A Chapter 11 bankruptcy applies mainly to businesses and corporations, where a plan is drawn up that allows a company to reorganize, while the day-to-day operation of the business continues. So obviously this wouldn't apply to your situation.
Learn the difference about what a Chapter 7 bankruptcy involves, and what a Chapter 13 bankruptcy involves, so you can familiarize yourself about how the two options work. Discussing the specifics of each would be beyond the scope of this article, so be sure to do your due diligence about this most important topic that will impact your financial life for years to come.
Once you've learned all you can about bankruptcy, it certainly won't hurt to consider other options. For example, you might decide to consolidate your debts into one large monthly payment instead of filing for bankruptcy. If you're considering bankruptcy because you continuously miss paying your bills on time each month, or if you feel overwhelmed by credit card debt, it may very well be the best option for you at this time.
You can also try living within your means for the next few years, which works well if you don't have a family or anyone to be responsible for. Another option is attempting to negotiate with your creditors. There are numerous options for getting back on your feet financially besides declaring bankruptcy, so be sure to consider as many avenues as possible in your efforts to get out of debt permanently.
If you're still considering bankruptcy, find out what the eligibility requirements are. If you're insolvent, meaning you don't have a sufficient income to service your debts, you probably won't qualify for a Chapter 13 bankruptcy. On the other hand, if your situation is just the opposite, you probably won't qualify for a Chapter 7 bankruptcy. In some rare cases, you may not qualify for either, and this is a sign that you didn't think through your other choices carefully.
Take into consideration all of your property and debts if you qualify. What will become of your home, your car, retirement plan, etc.? Each state has different specifications when to comes to this, so be sure you understand how your property will (or won't) be affected. It's important to compile a list of all your assets and/or debts. As was indicated above, some debts won't be discharged by filing bankruptcy such as child support payments.
Once you have all of the necessary information compiled, begin the declaration process immediately and let nothing stand in your way. It's best to work with a lawyer or a financial professional to complete this task, and remember to be completely honest at all times. Declaring bankruptcy isn't for everyone, but it can work for some people depending upon their circumstances.
This content-laden article packed with valuable information was brought to you by Chuck McDuffie, who's the owner of the Credit Card Debt Slavery.com that offers practical and useful information to those who are experiencing credit card debt to become debt-free. To learn more, visit his blog today at: http://creditcarddebtslavery.com
Article Source: http://EzineArticles.com/?expert=Chuck_McDuffie
Article Source: http://EzineArticles.com/8446435
1) Credit card bills.
2) Lawsuit judgments.
3) Medical bills.
4) Unsecured business debts owed by a sole proprietor (such as debts to suppliers, consultants,
accountants or architects).
5) Obligations under leases and contracts entered into by a sole proprietor (including commercial and residential property leases and leases to rent equipment).
6) Personal loans and promissory notes.
However some types of debt will remain intact after a Chapter 7 personal bankruptcy, which means you'll still owe them when your case is over -- just as if you hadn't filed for bankruptcy. Some common types of debt that aren't discharged are:
1) Back child support, alimony, and other domestic support obligations.
2) Court-imposed fines, penalties, and restitution.
3) Certain tax debts -- including recent back taxes, any back taxes for which you didn't file a tax return, trust fund taxes (the employee's portion of Social Security and Medicare taxes), and debts you took on to pay nondischargeable taxes (for example, if you took a cash advance on your credit card to pay your most recent tax bill).
4) Debts of more than $650 to any one creditor for luxuries in the 90 days before you filed.
5) Cash advances of more than $925 taken within 70 days before you filed.
6) Loans you owe to your pension plan -- such as money you borrowed from your 401(k).
7) Student loans, unless repaying them would constitute an extreme hardship.
8) Debts arising from your own fraudulent activity (for example, lying on a loan application), if the creditor can in fact, prove the fraud to the bankruptcy court.
9) Debts resulting from an incident in which you kill or injure someone while you're driving under the influence (DUI).
If you decide against filing for bankruptcy, you might consider debt consolidation or negotiating with your creditors. However, if after taking a careful evaluation of your entire financial situation, you firmly believe declaring bankruptcy is the most appropriate option for you, you must take the necessary steps to make this financial process work for you in the best possible way. Seek the advice and counsel of a financial professional who will assist you in accomplishing this.
It's important to understand as much as you can about bankruptcy. There are numerous resources available to you online (such as forums, websites and blogs) and offline (such as your local library) for you to learn everything you need to know about the entire process.
For example, if you're filing individually, you should file a Chapter 7 or a Chapter 13 bankruptcy. But you'll need to determine which one would be the most appropriate for your particular situation. A Chapter 11 bankruptcy applies mainly to businesses and corporations, where a plan is drawn up that allows a company to reorganize, while the day-to-day operation of the business continues. So obviously this wouldn't apply to your situation.
Learn the difference about what a Chapter 7 bankruptcy involves, and what a Chapter 13 bankruptcy involves, so you can familiarize yourself about how the two options work. Discussing the specifics of each would be beyond the scope of this article, so be sure to do your due diligence about this most important topic that will impact your financial life for years to come.
Once you've learned all you can about bankruptcy, it certainly won't hurt to consider other options. For example, you might decide to consolidate your debts into one large monthly payment instead of filing for bankruptcy. If you're considering bankruptcy because you continuously miss paying your bills on time each month, or if you feel overwhelmed by credit card debt, it may very well be the best option for you at this time.
You can also try living within your means for the next few years, which works well if you don't have a family or anyone to be responsible for. Another option is attempting to negotiate with your creditors. There are numerous options for getting back on your feet financially besides declaring bankruptcy, so be sure to consider as many avenues as possible in your efforts to get out of debt permanently.
If you're still considering bankruptcy, find out what the eligibility requirements are. If you're insolvent, meaning you don't have a sufficient income to service your debts, you probably won't qualify for a Chapter 13 bankruptcy. On the other hand, if your situation is just the opposite, you probably won't qualify for a Chapter 7 bankruptcy. In some rare cases, you may not qualify for either, and this is a sign that you didn't think through your other choices carefully.
Take into consideration all of your property and debts if you qualify. What will become of your home, your car, retirement plan, etc.? Each state has different specifications when to comes to this, so be sure you understand how your property will (or won't) be affected. It's important to compile a list of all your assets and/or debts. As was indicated above, some debts won't be discharged by filing bankruptcy such as child support payments.
Once you have all of the necessary information compiled, begin the declaration process immediately and let nothing stand in your way. It's best to work with a lawyer or a financial professional to complete this task, and remember to be completely honest at all times. Declaring bankruptcy isn't for everyone, but it can work for some people depending upon their circumstances.
This content-laden article packed with valuable information was brought to you by Chuck McDuffie, who's the owner of the Credit Card Debt Slavery.com that offers practical and useful information to those who are experiencing credit card debt to become debt-free. To learn more, visit his blog today at: http://creditcarddebtslavery.com
Article Source: http://EzineArticles.com/?expert=Chuck_McDuffie
Article Source: http://EzineArticles.com/8446435
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