What Is A Personal Bankruptcy?

A personal bankruptcy is a form that when filed will discharge obligations to creditors. Bankruptcy forms can be located online or an attorney can prepare one for you.

Contrary to popular belief, personal bankruptcy does not discharge all debts. Specific types of student loans, called secured student loans, must be paid even after some one has filed bankruptcy. Also, it won’t discharge taxes owed to the state or federal government. Likewise, child support payments and money owed to victims of drunk driving accidents will still be required to be paid. Chapter 7 and Chapter 13 bankruptcy filing are still subject to the above criteria.

Personal Bankruptcy does however discharge ‘unscheduled debts’. Unscheduled debts are things like money owed to creditors, which include credit card companies, auto loan lenders, and money owed to personal contacts that lent you money. These creditors and others who are owed must line up to try and get any property not exempt under their state’s exemption laws. Those who are deemed most worthy get their pick of the debtor’s bankruptcy estate first, and on it goes until nothings left but assets that are exempt from being taken under that state’s laws. Usually states do a good job of keeping these creditors from taking everything because generally most creditors may not even receive a single penny. Since the stakes are so high for these creditors, they often try to band together to fight over who gets first pick of the bankruptcy estate, just so they can recover a fraction of what’s owed to them. It’s a rather fruitless fight creditors have to go through but most people say they deserve it for lending an amount the debtor has no ability to repay.

Often times businesswomen or businessmen file for personal bankruptcy for themselves and their company. It’s perfectly ok to file for a chapter 7 bankruptcy while your simultaneously filing for a chapter 11 bankruptcy for your business. These cases tend to be more complicated though, which can cause ‘legal sparks’ to fly when exemption laws collide.

Filing for personal bankruptcy is usually a very relieving experience for most people. They feel like the weight on their shoulders has lifted, it’s like the greatest gift you could give them. Most people avoid credit as much as possible for a few years until their credit report is clean again so they don’t have to deal with the ‘ballooned interest rates’. Theirs others who talk of repairing your credit score right after bankruptcy to lower those interest rates. I think that kind of talk just gets people in trouble again, because everyone knows the best way to get your credit score up is to get credit cards and loans that will just put you back into debt.

Disclaimer: This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as legal advice or used to make legal decisions. Consult an attorney in your area if you’re seeking legal advice.

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5 Hot Facts About Bankruptcy No One Else Will Tell You About

If you are considering filing for personal bankruptcy, Here are some of the myths and facts about it.

1)Will Bankruptcy Stop Foreclosure On My Home? If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure at any time prior to the sale. Note; bankruptcy does not eliminate mortgages on your property.

2) Credit after bankruptcy. Some banks offer credit to “potentially” risky customers. The debtor puts up a small amount of money in order to secure payment in the future. Once the debtor proves his ability to pay, his credit limits are raised. In recent years, creditors have looked more to a debtors stability, as opposed to the fact you filed for bankruptcy. Call you bank now and tell them about your situation, help can be closer thn you think.

2) Filing bankruptcy with a bankrupct expert lawyer is often the best option. If you are facing financial problems and you are seriously considering filing for personal bankruptcy, you should speak to a bankruptcy expert lawyer. Bankruptcy can be a very difficult, complex and very complicated legal process, so it is very important to seek an experienced and skilled bankruptcy lawyer. Filing for bankruptcy is a complex and time consuming process that can leave you overwhelmed. Look online and dp some research, ut can save you time andlots of money.

3) You can not file for Personal Bankruptcy… Or? The truth is that anyone can today file a personal bankruptcy. You will have no difficulties at all. Changes made by the US Congress in early 2005 allow any debtor to file for personal bankruptcy. Bankruptcy is also now governed by state laws. The laws differ from state to state, with mounds of legal paperwork to complete, so be sure that the lawyer you select is an expert in this field. take your time and do your research, again this can save you lots of time and money.

4) Individuals wishing to file bankruptcy under Chapter 7 or Chapter 13 must show proof of income by providing federal tax returns from the last tax year. If an applicant is ineligible for filing under Chapter 7, he or she must file under Chapter 13 instead. Ask ae bankruptcy expert about this..

5) One of the most confusing parts of the new bankruptcy law is the bankruptcy means test. With the new bankruptcy laws in effect, debtors have to first pass a 2 part “means” test before filing for Chapter 7.

The actual test is alot like doing your taxes. The means test revolves around the median state income for the state in which the debtor will file bankruptcy. Under the “Means Test”, any creditor, trustee or judge will look at your monthly income, minus certain living expenses like food and rent. Your Chapter 7 bankruptcy will likely be successful if you are unable to pay at least $6,000 or $500 per month over the next 5 years.

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The Reasons To Fight Filing For Personal Bankruptcy

Today’s culture has seen an unmatched rise in the number of people who file personal bankruptcy. With the amount of consumer debt at an all-time high, a growing number of people feel that this is the best option for them so they can start over with their finances.

The only problem with this idea is that it does not change a person’s behavior. Instead, it almost reinforces the irresponsible habits and behaviors that resulted in the debt in the first place. People who find themselves in this predicament and want to avoid personal bankruptcy will want to look into bankruptcy alternatives before making their final decision.

Bankruptcy is, in a nutshell, a person’s inability to repay the debts that they have accumulated with any number of creditors. When a person decides to file bankruptcy, they are often admitting that they see no way out of the debt that they have built up.

This can happen over a period of a few months or several years and for a variety of reasons, including school loans, medical bills, and credit cards, among others. Many people encounter circumstances that make it difficult to repay their debts while others might buy a lot of stuff on credit with the plan of declaring bankruptcy the entire time.

For years, many people decided to file bankruptcy in order to rid themselves of their student loans. Unfortunately for some people, the United States has recently made laws that exempt federal student loans from personal bankruptcy status. This means that even when a person has declared bankruptcy, they are still responsible for their federal student loans. Currently, this is the only exemption that debtors cannot add to their bankruptcy, but certain circumstances can allow for special provisions in very few cases.

For those who want to avoid bankruptcy, there are several ways to get out of what might seem to be insurmountable debt. Several bankruptcy alternatives are available and they are worth the extra amount of effort and work in order to preserve your credit.

Since the United States passed new laws, it is almost impossible to have all of your debts simply relieved. Debts are more likely placed in a repayment plan with courts relegating a percentage of your income to each debt. The problem with this is that you can make deals with your creditors to make payments yourself without damaging your credit as much as a personal bankruptcy would do.

Even if it takes some hard work and effort, researching your financial options is of utmost importance for making the right decision. Instead of just allowing a personal bankruptcy to affect your credit for years to come, look into the ramifications it will have on your financial future.

For instance, it will always affect your ability to get a low interest rate when you decide to buy a home or for many other types of major purchases. The best thing to do is to pick up as much overtime and negotiate with your creditors in order to pay them off. Of course, it will take some extra effort on your part, but your credit rating will thank you for it.

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