Bankruptcy

Bankruptcy is a common concern and misconception by many people. Bankruptcy should be your last resort, if you have no other debt relief options you should do everything that you can not to file. You should view all of your options and avoid bankruptcy. Not only will filing bankruptcy haunt your credit and be a burden to you but it will remain on your credit for the next 7-10 years and you will have a life long accountability for the bankruptcy. During the time you file bankruptcy it will be difficult and next to impossible to obtain a credit card, secure a car loan or any loan of that matter; and a home will be out of the question while filing bankruptcy. After your bankruptcy has been discharged you will be able to buy a home after 2 years but you would have to come up with at least 15-20% for a down payment. In some cases, bankruptcy may be the only option that you have to receive debt relief. Most people do not understand that there are other options to become debt free and on the road to financial freedom. Not everyone is quite clear on when bankruptcy would be your only option. An example would be if John owes 100k in credit card debt and his income is 45k and your bills overshadow your income, filing bankruptcy would be your best option in this scenario. In a bankruptcy if you have personal assets such as home(s), automobiles, or secured assets your possessions may be liquidated and used to pay your creditors. So if deciding if bankruptcy is the right solution for you it needs to be decided if this would be the best move for you and your family.

Even though after filing and it has been taken off your record some creditors can refuse you from getting credit or even a loan because you have filed bankruptcy. Also another item with bankruptcy is that you can only file once every 8 years, so the question then becomes why file bankruptcy when there can be other options available to you (debt settlement is an alternative form of bankruptcy) and if you do need to file make sure that it is the last resort that you have. In more cases than not debt settlement is going to be your best option and give you debt relief.

Chapter 7 Bankruptcy

The most sought after form of bankruptcy is chapter 7 bankruptcy. This is sometimes called a straight bankruptcy which is a liquidation proceeding. The person who wished to file would then transfer over all non-exempt property to the bankruptcy holder who would then in turn transfer that into cash for distribution to the different holders of the debt. The enrollee will receive a discharge of all their available dischargeable debt usually within several months. If you have assets while filing a Chapter 7 the judge will cease these assets to cover the debt. If there are no assets to render you then will be forgiven of all debt and then will move towards building credit. Even though you can start to build credit after filing Chapter 7 the cons of filing far out weigh the pros. You may be debt free and possibly have the opportunity of not owing on the debt then the cons are much more damaging and long lasting. This is the main reason why you should avoid bankruptcy. You can have your assets sold off to suffice the debt. Filing will always be on your record and people say that bankruptcy is a short term fix for a lifetime of accountability.

Chapter 13 Bankruptcy

Out of the two types of bankruptcies Chapter 13 is the worst, not only will you still owe on the debt but the fact you filed will follow you the rest of your life. If you want to file Chapter 7 and the judge deems it necessary and sees that you can have the means to repay your debt he can enroll you into a chapter 13. With a Chapter 13 you will be placed on a repayment program to pay back your debt in full and can have your wages garnished if you are unable to make the payments. Not only will the fact of filing bankruptcy stay on your credit for 7-10 years and will follow you the rest of your life you will have to pay back the entire amount owed. This by far is the worst form of bankruptcy. More likely than not a lien will be placed upon your home and you can actually also end up losing your home to cover your debts. So in conclusion, if you have a debt relief option you should take it over filing bankruptcy as said before it should be your last option. Why not find out all your other possible options and then make a decision that would be the best for your family so you can become debt free and on the road to financial freedom.