File Your Bankruptcy

March 31, 2009 by  Filed under: Bankruptcy 

With the ongoing financial crisis, millions of people are finding themselves struggling to get out of debt. While some are lucky and a credit counseling session can work wonders for them, there may be few who are left with no other option other than bankruptcy. Undoubtedly, filing bankruptcy gives you an opportunity to “start afresh”; nevertheless, it has a long lasting effect on your credit rating. Filing bankruptcy is not an easy task and you need to have a thorough understanding of the entire process. Earlier, you could declare yourself bankrupt if your financial situation went haywire. However, the new federal laws related to bankruptcy, make it mandatory that you need to qualify for the same. You may be having several questions related to bankruptcy and it is important that you get them answered by a legal expert.

A bankruptcy lawyer can help you out in this regard. It is good to have a good lawyer by your side but it is also important for you to know the entire process well. It is your money and assets that you are trying to save. And it is important that you become debt free legally and steadily. Don’t rush because your credit rating is at stake and you can’t afford to ruin it. Filing for bankruptcy reduces your chances of getting fresh credit in future. It doesn’t mean that you will never get credit, but in most of the cases, the lenders/creditors either charge a very high interest rate or wait for your credit score to improve a bit so that you become eligible.

If you have decided to file bankruptcy, there are 2 options you can opt for. Chapter 7 bankruptcy and Chapter 13 bankruptcy are 2 options that can make you debt free. In Chapter 7 bankruptcy, your personal assets are liquidated to pay off creditors. However, the assets should have enough equity. On the other hand, Chapter 13 doesn’t require you to liquidate your assets; instead your debts are paid off in a systematic manner as per a new repayment plan. You can retain your assets in Chapter 13 bankruptcy.

Even if you file bankruptcy, you may have certain reservations that hinder you from doing so, nevertheless, you also have ample chances to better your credit rating and to show how responsible you are financially.

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