Take Charge Of Your Finances By William Blake. More than ever before, Americans are drowning in debt. Studies show that the average American family uses up to 8 credit cards, and carries between $7,500 and $10,000 in credit card debt alone--add Read more...
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Is Bankruptcy Really The Only Choice You've Got? By William Blake. If your finances are in a mess, you may have considered bankruptcy. Even though your debt may be wiped clean, there are many other end consequences.
If you find that you can't seem to pay your bills every month, you may consider filing for bankruptcy. As a consumer you have two choices: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is when all your assets are sold off in order to pay all or part of your debt. With Chapter 13 bankruptcy, it's more of a debt restructuring and you will make a plan to repay part of the debt overtime to your creditors.
Your will be damaged if you file for bankruptcy, maybe for as much as ten years. If you apply for any during that time the creditor will be informed of the bankruptcy.
Previously, people have taken advantage of bankruptcy laws. They were allowed to file more than once for Chapter 7 so many used it to wipe out all their debt.
Individual states decided on what if any assets will be excused from seizure for a bankruptcy. In knowing that, people used any available cash to purchase things like cars and homes to avoid payment while still keeping their personal items. If this happens, very often the creditors would get very little back from the settlement.
This has been changed by new laws. Courts used to have free rein when it came to who could file for Chapter 7 bankruptcy. Now certain standards have to be met first. In order to be able to file for Chapter 7, your income must be below the average income
of the state where you live. Your income then goes through a calculation that determines if you have enough disposable income to be able to pay back twenty-five percent of the debt owed.
More people that file bankruptcy will have to file under Chapter 13. The courts decide what a person could pay from the information provided to them. There is an allowance made for rent/mortgage, food, and other pertinent bills. With the new bankruptcy law, standards set by the IRS determine allowable values for each of these bills. A certain amount is exempted, and the payments are determined from the rest.
Because there are more hoops to jump through, bankruptcy lawyers are charging more for their services. The whole process of bankruptcy will cost the filer more than before, which will make them think twice about the process. counseling sessions are also required as a precursor to filing for bankruptcy. A counselor may determine that they can help you and thus eliminate the need for bankruptcy proceedings.
Filing for bankruptcy is a major issue and should not be taken lightly. Although it clears your debt, it does come with its own price tag.
Tire of struggling to keep up with your card debt? Learn some simple debt consolidation tips on the Debtopedia website. Get a free copy of my report "Secrets Of Card Debt" at www.debtopedia.com
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