Are You Eligible for Bankruptcy

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When there are no other alternatives you will need to consider bankruptcy.

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While most people will never want to be in such a situation sometimes bankruptcy might be the best option because it will stop collection call agencies and other problems relating to severe debt.

Before you get to the stage where you need to consider bankruptcy you will probably be in a position where your credit score is very low anyway and there is little concern for any further damage that will be done to it.

Even though bankruptcy will show up on your credit report for ten years it will at least give you the chance to start rebuilding your life with a clean slate where you will not have to repay the debt or possibly only a portion of it. Initially there will be very little chance of getting credit but as time passes by you will have more opportunities to get small amounts of credit and start rebuilding your credit score.

These small steps will allow you to continue rebuilding your credit score where you might never have been in the position to do so if you had continued to struggle under the overwhelming burden of excess debt.

Filing for bankruptcy is a complicated, emotional process. It involves more work than most people think, and it can potentially affect your life for many years. To determine whether filing for bankruptcy represents the best option for you, read through the information below. You may find that your situation doesn't require filing for bankruptcy, or that bankruptcy won't have the effects that you desire. On the other hand, filing for bankruptcy could help you out of a difficult financial situation.


Contents

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dis-chargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so [Chapter 7 Bankruptcy| Chapter 7] will give that person a relatively quick "fresh start".


One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

To verify your eligibility to Chapter 7 Bankruptcy, you can test the "Means Test Calculator".

What is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 Bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts. More information on Chapter 13.


Alternatives

Learn about alternatives to bankruptcy, including Debt Consolidation, repayment plans, debt management plans and debt default.

Many successful business people throughout the world have faced bankruptcy in their career so even the best of them can come unstuck. You need to look at all your options and consider what is the best for your long-term financial outlook rather than what you or other people might think.

At the end of the day it doesn't matter what people's opinions are as you have to do the best for yourself in your life and financial problems aren't something that should dictate the quality of your life when you have done all you can to resolve them.


References