What Happens In A Personal Bankruptcy?
Consumer Credit Counselling is often a first step, but once you
realize you can't keep up with the payments, you should take
action quickly. Ignoring the problem will only make it worse as
creditors pile on late fees and take legal action to take your
property and wages.
Types Of Personal Bankruptcy
There are two types of bankruptcy typically filed by individuals:
Chapter 7 is the most common, where most of your debts are
wiped out. A Chapter 7 filing will discharge your debts, except
for alimony and child support, federally insured student loans,
criminal and traffic fines, state and federal taxes due within
the last three years, and debts that resulted from wilful
malicious acts.
Chapter 13 allows you to pay back your debts on a payment plan,
and may also reduce some of your debts such as medical bills. A
Chapter 13 personal bankruptcy puts you on a mandatory repayment
plan where your income is taken into account. You are usually
given longer to pay off your debts and may have some of the
debts reduced such as medical bills and past utility bills.
Filing Personal Bankruptcy
Once you file, all of your creditors will be notified and a
court issue will stop wage garnishing,
credit
or harassment, and foreclosures. This is often the first
time you can breathe a sigh of relief as the phone stops ringing
and you can get back on track with your life and your
credit.
Personal bankruptcy can be a clean start to a bright future.
It is very difficult for anyone to decide to file bankruptcy,
and is rarely taken lightly, despite what your creditors say.
Once you file for personal bankruptcy you should work with a
financial advisor to learn what happened, and how you can avoid
taking on debt in the future.
Do-It-Yourself or Hire an Attorney?
You can hire an attorney for any where from $600 (for
individuals only), to $1,000 and up (for couples and
businesses). You can also spend hours away from work at your
lawyers office, or you can file bankruptcy 100% online with no
office visits required. For 95% of the people filing bankruptcy,
you can hire a paralegal, who is well-versed in the preparation
of bankruptcy filing documents, to do the work so you file
quickly and cheaply.
For those times when you want an attorney to appear in court
with you, feel you need qualified local legal help, or just want
to be safe, consider hiring an attorney to represent you and
protect your financial interests.
You can call an attorney in your area, or you can get a list of
pre-qualified bankruptcy attorneys that know the bankruptcy laws
and exemptions in your state. We highly recommend that you be
smart and safe! Use a
free online legal access service
that lets you review the backgrounds of pre-screened local
attorneys, then you decide who to call, plus the service is
absolutely free and confidential!
Avoid finance companies offering debt-consolidation plans.
These companies may charge high interest rates and tie up much
of your property as collateral. Compare your options to
consolidate debts, or
get a
free debt evaluation now.
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