Buying Into Financial Woes

Over two million consumers filed for bankruptcy last year. Before you decide that you need to file for bankruptcy, as a consumer you should do the research and find out exactly what it is and whether you are truly in need of it. There is a difference between consumer bankruptcies and municipal bankruptcies. Consumer bankruptcy is the most common since it involves things such as credit card debt, medical bills and car loans. One of the few things not covered by bankruptcy, no matter the type, is secured loans such as student loans or child support.

Municipal bankruptcy is where a city, town or even school district files for bankruptcy. At one point in time, it was called Adjustment of Debts of a Municipality and is now under chapter 9. Sometimes, depending on which chapter the consumer bankruptcy is filed under, you could be able to keep your things after you file. Basically if, after financial counseling, you are deemed qualified to file, then you need to decide which chapter is right for you.

Chapter 13 allows the consumer to keep everything they owe money on while obliging them to pay over a certain amount of time, usually three to five years. Consumer bankruptcy tops the list as far as bankruptcy goes because it seems as though everyone is a consumer of some sort. However, there are options such as pre filing counseling and there are wonderful agencies that do debt consolidation to help get you back on your feet.

Once you get the ball going in that direction it is hard to stop it. There is one way that you can lessen the amount of time you are in a bankruptcy situation though.

If you file for chapter 13 bankruptcy you generally have between three and five years to pay off your debts and charge off your bankruptcy. Chapter 13 bankruptcies are required to give a pay off amount. This means that when you file a chapter 13 there is a pay off amount given for the total balance of the bankruptcy. If you have a home you can choose to use the equity in your home to pay off the balance of your chapter 13 bankruptcies. You can do this by either refinancing your existing loan, or getting a home equity line of credit. There are benefits to either option and the choice really will depend on what fits your family, and financial ability.

Often times you can find a lower interest rate for your home loan then the one you currently have which will save you money and allow you to have a longer time to repay your loan. You may also be able to lower your monthly payments as well, which can help you during this financial strain. The biggest key factor to being able to do this is that you ensure that when you file your chapter 13 bankruptcy papers you are allowed to incur debt while in bankruptcy status. If you are not allowed to incur debt then you will be unable to refinance or get an equity line of credit.

Bankruptcy – What You Need To Know Filing

When there’s no other way for the business to remain afloat, then you can consider filing for bankruptcy. It’s identifised as starting new while you settle all your obligations by legal means. You can avail of four forms of bankruptcy.

Each of these bankruptcy laws has been taken from the bankruptcy code, and they possess particular parameters that must be fulfilled for the debt to be considered ended.

Debt repayment (chapter 13), family farmer or fisherman (chapter 12), reorganization (chapter 11), as well as liquidation (chapter 7) are the fundamental kinds of bankruptcy. Bankruptcy laws are treated differently and so should be the kinds of bankruptcy.

The chapter 7 assures payment of debts through assets owned by the debtor. Properties and equipment shall be evaluated by a court appointed trustee. He also keeps the assets. If these assets are assessed and their worth known, they would be transformed into cash.

The cash would then be paid to your different creditors. Once the court proclaims that you have filed a chapter 7 bankruptcy this action will remain on your public bankruptcy record for around ten years. The process of bankruptcy is varied with the other forms of bankruptcy.

Companies, meanwhile, can take opportunity of chapter 11. This encourages reorganization of the company so the corporation can earn more profits. These money shall then be utilized to settle all debts to creditors.

You could utilize the time in repayment of debt to search methods on how you can handle obligations more efficiently so you could pull your corporation from financial predicaments. A lawyer can help you discover the ideal free credit repair. It’s also smart to seek their advice as chapter 11 could be a very complex procedure.

Fishermen and family farmers could now repay their obligations with their earnings in the future. Chapter 12 is specifically created for that purpose and for those kinds of individuals alone.

You could pay your obligations over a specific period with chapter 13. If approved by the court, you could have until 5 years to pay your debts.

A legitimate financial problem would be subject to a direct stay order to be issued by the court when you’re filing for bankruptcy. This way, your creditors shall have to deal with your lawyers with regards to payment terms. Your creditors cannot ask you personally.