Bankruptcy filings are growing every year. Most bankruptcies
are forced by aggressive creditors and collectors that
scare the average consumer to seeking protection from
Many bankruptcy can be prevented. Our goal is to inform
and educate consumers so that they are aware that bankruptcy
is the very last option. There are several other debt
eliminating and debt reduction options.
One hidden unknown about bankruptcy is that you have
to openly admit that you have filed Bankruptcy for the
rest of your life. Businesses and financial institutions
can easily find your Bankruptcy by searching the Internet
for court records. Filing a Bankruptcy may mean looking
at higher interest rates for the rest of your life.
Two types of consumer bankruptcy,
chapter 7 and chapter 13
Bankruptcy Chapter 7
Chapter 7 is the most common type of filing. This is
most common because most debts are written off and do
not have to be paid back.
Bankruptcy Chapter 7 has all the same stigmas as Bankruptcy
Chapter 13 but have loss of privacy, ten year impact
on credit history, higher interest rates.
Bankruptcy Chapter 7 is recommended for people that
have no choice. There are people that can barely afford
to put food on the table and keep the lights on and
have substantial amount of debt. This is a good time
to think about Bankruptcy Chapter 7. You will not lose
everything. Every state has its own requirements of
what you will be able to keep and what you will loss.
When you file Bankruptcy Chapter 7 you have tp go before
your state court asking the judge for a supervised liquidation
of your assets to pay your creditors. Each state has
its own requirements of what can be Exempt.
Most people who file Bankruptcy Chapter 7 have nothing
but Exempt Property. There is nothing to liquidate and
therefore nothing to pay to the creditors. The creditor
accounts are then discharged by the judge. Leaving you
with very little or no debt.
Bankruptcy Chapter 13
Chapter 13 is very similar to credit counseling, supervised
by the courts. When you file Bankruptcy Chapter 13 you
are going before your state court. You ask the judge
for protection from your creditors and collectors. Chapter
13 requires the full amount of the debt is paid off
with government supervision over a three to five year
If you file Bankruptcy Chapter 13 you are going before
your state court and asking the judge for protection
from your creditors and collectors. In a Chapter 13
the full amount of the debt is paid off with government
supervision over a three to five year period. ost of
the debt will have to be paid back by the borrower.
Typically any fees, finance charges and interest are
People that have a substantial amount of debt and can
afford to pay it off in three to five years should not
file for Bankruptcy Chapter 13.
Bankruptcy Chapter 11
Chapter 11 bankruptcy is for businesses in debt. If
a company declares bankruptcy under Chapter 11, it will
attempt to reorganize. In that case, management may
continue to run the day-to-day business operations,
although the bankruptcy court must approve all significant
business decisions. If the company ultimately succeeds
in reorganizing, you may be able to exchange your old
stocks or bonds for stocks or bonds in the new company.
But the new securities may be worth less than your original
investment -- or the bankruptcy court may determine
that stockholders don't get anything because the debtor
A company also can file for bankruptcy under Chapter
7 if it intends to stop all operations and go completely
out of business. The bankruptcy court will then appoint
a trustee to liquidate the company's assets to pay off
the debt, which may include debts to creditors and investors.
Bankruptcy can be avoided
Bankruptcy is your last debt reduction option. You
have other options that can reduce your debt.
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