When is the right time to file personal bankruptcy? This is a personal question that must be answered on a case by case basis. My general thought is that if a person can bail himself out of debt within a period of six months, he should not file a bankruptcy. The hit on his credit rating will not be worth the fresh start. On the other hand, if the person cannot bail out within six months and the prospects for getting out of debt seem bleak, then filing Chapter 7 bankruptcy is probably the better idea.
Many of my clients worry about their credit after filing bankruptcy. They worry about getting financing for an auto, a house or even an apartment. What they fail to consider is that they cannot get credit now under their current financial situation. They must correct the negative credit information, get out from under their debt and try to re-establish credit in the future.
It usually takes approximately two years to qualify for a decent mortgage after filing Chapter 7 bankruptcy. One can obtain an auto loan within 120 days of filing a bankruptcy. One can lease an apartment immediately upon a showing of an ability to pay the rent along with a modest security deposit. Thus, there is a life after bankruptcy. In fact, as many of my client will attest, a pretty darn good life. A life free from creditor harassment. A life full of opportunity to start anew instead of a life of down and outs. One must make that tough decision to self-evaluate their financial situation. Can the person continue to live under the same financial conditions day after day? Is there a light at the end of the tunnel? Does the person even know that he is in the tunnel?
Another factor to consider is the type of debt that one has. If the debt is exclusively student loans, a bankruptcy will not help. Student loans survive a bankruptcy filing and are generally held to be non-dischargeable. If the debt is for past due maintenance, alimony or support, do not consider a Chapter 7 bankruptcy. The debt will simply not be eliminated. However, if the debt is mostly unsecured debts, such as credit card debt, personal loans, services and utilities, then Chapter 7 bankruptcy may be a good option.
To qualify under the current laws, a person must be either earning less than the median amount for a family of his size or qualify under the strict means test. In essence, if someone has the ability to repay all or a portion of his debts, the court will mandate that it happen. If someone attempts to file a Chapter 7 bankruptcy case, despite his ability to repay, the case will likely be dismissed by the United States' Trustee.
The Chapter 7 bankruptcy is our most popular form of personal bankruptcy here in the US. Often times we have to resort to it because we have experienced an unplanned, sudden loss of a job, or a major injury. If you truly want to discharge all of your debts and have a fresh financial start then you must have bankruptcy liquidation under this chapter.
Even if your deep into debt, if you qualify for a Chapter 7 bankruptcy then you can get out of your financial situation. The best way to qualify is to have little or no assets in your name. You can do this by relinquishing the ownership of your valuables to your family or friends. The best way to do this is with a legal bill of sale form. This will give you a legal way to prove you no longer own those assets. It's important to do this anyway because creditors may try to stake claim on those assets.
If you qualify, then filing for a Chapter 7 bankruptcy is probably your best option, and should be taken into consideration. There are some debts that you can't discharge though such as federal student loans, alimony, and child support payments owed. If one of these is the main reason for your debt then forget about going this route, but if they're not the main reason then you're on the right track.
It often times becomes overwhelming for some of us to keep up with debt. Getting rid of it once and for all will free you from the stress caused by your overwhelming financial burdens. It's an amazing feeling for those of us who have been in serious debt before.
Another great thing about the Chapter 7 bankruptcy is that you will be eligible for new loans within months. Everyone knows loans are a great way to build credit. Almost immediately after filing you can start to rebuild your credit, that's the great thing about going this route.
Probably the best thing getting rid of debt is ending the phone calls from creditors. Finally be able to experience peace and quiet for once in your home. Also, you know have had a crash course in what will happen when debt is improperly managed and you will be better suited to handle any future financial trouble.
Also, once you eliminate your debt you can begin to rebuild your savings account, education fund, retirement fund, and whatever other kind of fund you want. You no longer will need to worry about creditors trying to stake their claim on your hard earned cash.
There are so many benefits to filing a Chapter 7 bankruptcy its no wonder why it's the most popular form of personal bankruptcy in our country.
Both David Siegel & Nicholas Copernicus are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
David Siegel has sinced written about articles on various topics from Dental Practice, Bankruptcy Law and Estate Planning. David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs.. David Siegel's top article generates over 6600 views. to your Favourites.
Nicholas Copernicus has sinced written about articles on various topics from Estate Planning, Legal Matters and Cars. '' has been brought to you by Legal Forms Bank . Biz - a database of. Nicholas Copernicus's top article generates over 90500 views. to your Favourites.