Find out how and when 2 types of bankruptcy helps you repay debts. Check out it's impact on your credit score. Know the reasons to hire bankruptcy attorney.
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Filing for bankruptcy: When and how to make use of this legal weapon

Bankruptcy is regarded as the ultimate debt relief solution – one which is chosen only when other debt elimination processes fail to revive the finances of a debt ridden individual. It is a legal process which promises fresh financial start to the consumers by eliminating their outstanding bills and dues. The federal law based judicial course of action either results in the discharge of most or all unsecured debts of an individual or reorganizes the debts with a court-approved payment plan. However, certain bankruptcy cases may also involve loss of the consumer's assets to pay off his creditors.

When can you file bankruptcy?

Bankruptcy might seem to be the best debt solution when nothing else seems to work in your favor. One or more of the following common reasons might prompt you to file for your bankruptcy.

  1. You are burdened with enormous debt and not in a financial situation to pay off those
  2. None of your attempts to pay off debt worked
  3. You risk losing assets to creditors
  4. You are unemployed or have lost your job recently

What are the two main types of consumer bankruptcy?

Bankruptcy comes along in various forms. Since bankruptcy leaves a noticeable mark on your financial history, it's extremely important to choose the right form which suits your specific situation. For this reason, it's sensible to sit with an experienced attorney for a pre bankruptcy counseling.

The two most common form of consumer bankruptcy are:

  1. Chapter 7 – Straight Bankruptcy/Liquidation: This is the basic liquidation bankruptcy for individuals and businesses. Since it usually involves the discharge of debt, it's considerably a simpler and faster process.
  2. Chapter 13 – Adjustment of an individual's debt: This form of bankruptcy adjusts an individual's debt in a way that his debts are repaid, as much as possible. It involves formulation of a court-approved repayment plan for individuals with steady source of income.

Why is it better to hire a bankruptcy attorney than to do it on your own?

It's not necessary that you have to appoint an attorney when you're about to file your bankruptcy. You can evidently represent yourself in the court. However, it's strongly recommended to consult one for bankruptcy help since, after the enactment of BAPCPA in 2005, filing bankruptcy have become much more complicated and time consuming. A minor mistake during the filing process or violation of the bankruptcy laws, may result in rejection of your case.

Thus, before you decide to file your own bankruptcy, check out the following list to understand how an experienced bankruptcy attorney can be a better choice.

Hire Bankruptcy Attorney Do It Yourself (DIY)
Free initial consultation
Protection from creditor harassment
Appropriate legal advice (asset protection, valuation of assets, listing exempted property, etc..)
Protection from mistakes while preparing bankruptcy forms
Absolute peace of mind

How much is the cost of filing bankruptcy?

The term 'affordable bankruptcy' is misleading to some extent, since a debtor needs to pay the mandatory court fees sometime later after his case is successfully filed with the court. The filing fee for Chapter 7 bankruptcy is $306, while it's $281 for a Chapter 13 case. In addition to the court costs, the consumer also needs to bear the attorney fees for valuable bankruptcy advice.

How bankruptcy can affect credit rating?

A bankruptcy filing can have a significant impact on your credit score. Not only does it brings down your credit score, it also stays on your report for around 7 to 10 years. However, most individuals filing bankruptcy already suffer from poor credit situations. So, getting rid of the debts might seem a good option at that point. Moreover, just because you filed bankruptcy, it doesn't mean that you'll not be allowed credit within or after the 10 year period.

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Pages

Creditor's right: Do's and dont’s in chapter 13 bankruptcy

Creditor's right: Do's and dont’s in chapter 13 bankruptcy

Date: 11:24 pm 13th Jul, 2015 Article Rating: 
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Chapter 13 bankruptcy is one of the best ways to safeguard the property and pay off the debts with a suitable plan as well. Chapter 13 bankruptcy gives an opportunity to a debtor to adjust his/her debts according to their regular income. Of course the whole process will take 3 to 5 years, but with [...]... Read more


Bankruptcy Exemptions: Legal recourse to save your assets

Bankruptcy Exemptions: Legal recourse to save your assets

Date: 02:32 am 30th Jun, 2015 Article Rating: 
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5
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Exemptions are provided as per the federal bankruptcy code so their amounts usually remain the same and do not necessarily change from one state to another. These federal bankruptcy exemptions permit you to safeguard a particular amount of equity in your various assets. Out of several such [...]... Read more


Bankruptcy vs debt relief options - Who is the ultimate winner?

Bankruptcy vs debt relief options - Who is the ultimate winner?

Date: 03:11 am 15th Jun, 2015 Article Rating: 
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While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness [...]... Read more


Bankruptcy Fraud: How attorneys can turn the table for good

Bankruptcy Fraud: How attorneys can turn the table for good

Date: 11:32 pm 9th Jun, 2015 Article Rating: 
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“Sir, I have a serious problem and desperately need your help! My debts have spiralled beyond my control and I’m bankrupt again. I don’t want to file for another bankruptcy discharge so close.”So the attorney said: ‘Ok and what do you want me to do?’She said: ‘I want you to help me in [...]... Read more


Chapter 7 Bankruptcy: Fundamentals for a successful means test

Chapter 7 Bankruptcy: Fundamentals for a successful means test

Date: 04:58 am 1st Jun, 2015 Article Rating: 
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To file bankruptcy, you’ll have to undergo means test. However, you’ll have to first check your state’s median household income.In order to get rid of all your unsecured credit card debt as well as personal loans, you may opt for Chapter 7 bankruptcy. But, then it would become mandatory for [...]... Read more



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