Bankruptcy is a method that can help individuals or businesses pay back or eliminate their obligations under the guidance and protection of a bankruptcy court. Bankruptcies are usually Chapter 7 or Chapter 13 processes. With a Chapter 7 bankruptcy, the court wipes out the liabilities you owe. With a Chapter 13 bankruptcy a plan is drawn up with the bankruptcy court, explaining how you’ll repay your creditors. Some debt will have to be paid in full; while some of the others are not paid at all or simply part of the debt is paid.
There are, however, some debts that cannot be taken care of in a bankruptcy process such as alimony, child support or tax obligations. Because bankruptcy is an individual and often highly emotional call, it is up to the individual to file for bankruptcy. Before making that decision, there are specific facts you need to think about.
When considering bankruptcy, if you have enough money to pay those you owe, you may not qualify for Chapter 7 bankruptcy. Another point to consider is if it seems like your financial footing may be better in the near future, you may want to wait it out before filing for bankruptcy.
If you are thinking that bankruptcy will take care of tax debt or child support needs, think it over again. Bankruptcy won’t take care of these wants. Also, student loans will only be discharged in bankruptcy in some limited cases of extreme hardship, and these results will vary from court to court.
Another point to think about is the counseling that you’ll need before filing for bankruptcy. During this counseling and academic sessions, you’ll find out what it’s like when you file for bankruptcy. In some cases, your property could need to be handed over and you credit history will drop which will make it harder in the future , should you want or need a loan.
In addition, another point to think about is rather than filing for Chapter 7 bankruptcy, Chapter 13 may be a better option. With this plan, you pay off your dues and you get to keep all your property. Credit counseling can also be a big help.
It’s also significant to remember how you may feel after you sign up for bankruptcy. there were many that regretted bankruptcy because they felt humiliated and down. Some felt better paying down their bills and knowing they made an attempt to revive their good standing.
Take into account that bankruptcy can be positive in that many come away from bankruptcy with a more comprehensive understanding of the way to handle their money and that may stop future mistakes that could impel them into debt.
So, before filing for bankruptcy, check out counseling and educational sessions. By going thru this process first, you may understand better if filing for bankruptcy is for you. The method of counseling and academic sessions can also show you ways and methods on how to better handle your financial affairs and to prepare you to live a better financial life.
Often times, it requires a financial disaster for someone to see where they are going wrong and the way to make their lives better.