Personal Bankruptcy Updates

Mar 25th, 2014 | By | Category: Debt

The myths and misconceptions surrounding personal bankruptcy prevent many people who’re in urgent need of debt relief from filing bankruptcy. However, many of these popular beliefs about personal bankruptcy are far from true. Read on to acquire the truth about filing bankruptcy.

While your own experience of situations will define your embarrassment factor, filing personal bankruptcy is nowhere near as embarrassing that being harassed by creditors. Rather, taking responsibility for your financial situation is to be admired.

There are various forms of personal bankruptcy; liquidation and reorganization. The chapter you file will define how much of your assets will be utilized to repay your creditors. However, you’ll always be allowed to hold a number of assets, depending on which chapter of bankruptcy you file.

The Personal Bankruptcy Discussion Continues…

The world is seeing many people go through money issues worse than anything seen in recent years. Because of these troubles the number of bankruptcies has increased enormously. In 2009, 819, 262 people filed Chapter 7 and 370, 875 filed Chapter 13 bankruptcies. That is a significant increase when compared to the 2007 numbers of 413, 294 filings of Chapter 7 and 276, 649 for Chapter 13. With the amount of people filing both types of bankruptcies it would be relevant for someone to engage in a bankruptcy lawyer to understand and to speed up the process.

The most common type of bankruptcy filing in the United States is Chapter 7. This type of filing occurs when someone has a huge amount of debt but not many assets. When Chapter 7 is filed then an individual would use any assets they required to pay creditors. Although many debts will be written off, student loans, income taxes from the past three years, and child or spousal support cannot be taken away.

When someone is behind in paying for a car loan or mortgage, amongst other things, then they would likely file Chapter 13 bankruptcy. Anyone filing Chapter 13 would still pay their creditors part of their future income. That is one of the main differences between Chapter 13 and Chapter 7 bankruptcies, one offers full debt relief and the other offers a repayment plan.

In theory this is true, because everybody has access to the public records that record all bankruptcies. However, it’s very unlikely that anybody will search these public records. In addition, your creditors are prohibited by law from making your personal insolvency public. The only people who’re likely to know are those you tell yourself.

What is probably the harshest impact of personal bankruptcy is one thing that comes after the bankruptcy notice is advertised. The debtor’s name and personal business dealings are in jeopardy given the public nature of bankruptcy. Individuals have just one name unlike companies who can operate under different trade names. And since bankruptcy are publicly available, anyone can access the specifics of your bankruptcy.

An employer is forbidden by law from firing you just because you filed for bankruptcy in addition, you can sue him if it’s the case.

It’s true that a personal bankruptcy remains on your credit report for up to 10 years. However, you have the potential to repair your credit before that by sound and responsible fiscal management. If you apply for any type of credit, make sure the interest rates are reasonable and will not spin you into a cycle of debt again.

Filing for personal bankruptcy is normally a very relieving experience for most people. They feel like the weight on their shoulders has lifted, it is like the greatest gift you could give them. Most people avoid credit as much as possible, in order a few years until their credit report is clean again so they do not have to cope 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 sort of talk just gets people in trouble again, because everyone knows the most effective way to get your credit score up is to obtain credit cards and loans that will just put you back into debt.

You can file for personal bankruptcy, though the 2005 amendments made it more difficult to qualify. It is imperative to know your consumer rights and have a sound understanding of consumer debt law. For every consumer filing personal bankruptcy, retaining the assistance of a reputable bankruptcy lawyer is the best course of action.

If you have filed for personal bankruptcy, you’ll have to wait a time period of eight years from the discharge date of a chapter 7 filing if you need to file chapter 7 again. If you need to file chapter 13, you must wait four years after the discharge of a chapter 7, and two years after the discharge date of a chapter 13 personal bankruptcy filing.

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