The Facts About Bankruptcy
In hard economic times, such as those that we are experiencing at the moment, many people find that they are unable to cope with the level of debt they have amassed when times were good. The media is awash with adverts from companies who claim that they can make an individual debt free and that it is an easy process into become debt free.
Only later does one find that as a consequence of the bankruptcy process, one is left with very little.
These are the other sides of the same coin. What they don’t tell you is the consequences of bankruptcy.
Filing for bankruptcy is not something anyone should normally do, at least that’s possibly the best way to regard it. Particularly the easy come, easy go nature of some of these financial companies. Remember, they make money, you lose it!
However, at the end of the day, many people do explore all options and still find that they have reached the end of their financial road, and bankruptcy is the only option left open to them
If, after exploring all the alternatives, bankruptcy appears to be the only option, then all the alternatives within bankruptcy itself should be explored. This would also include consideration of a chapter 13 filing.
Chapter 13 is ideal for businesses and some individuals earning a regular wage. It is effectively a repayment plan, where the court steps in and reschedules the debt repayments, which are spread out over a 3 to 5 year period. Unlike the more common chapter 7 bankruptcy, there is no forced sale of assets
In a chapter 7 filing, all your assets are sold and the proceeds used to pay your creditors. Any outstanding debts left over after the money has been allocated a no longer the responsibility of the debtor, so the debtor walks away debt free (and also asset free).
The 2005 Bankruptcy Abuse and Consumer Protection Act makes it compulsory for every chapter 7 applicant to be means tested. This is to ensure that all debtors are paid as far as possible, and if the court finds that the applicant can, in fact, under a repayment plan, pay all their outstanding debt, chapter 13 will be enforced.
In the light of the above, one can perhaps see that bankruptcy is no easy option. Quite apart from the possibility of losing one’s home and possessions, one’s credit rating is destroyed. This can make it extremely hard to rebuild one’s financial credibility and therefore bankruptcy should be avoided at all costs.
Bankruptcy is always difficult, no matter what you might hear on TV. Bankruptcy also has long term implications. However, if you want more free information on bankruptcy, particularly chapter 13 bankruptcy law visBankruptcy www.chapter13bankruptcylaw.net.
