Is your current credit situation making you consider filing for bankruptcy?
Filing bankruptcy is a "last-resort" option for people who are experiencing extreme problems paying their bills. Typically, someone who files for bankruptcy has many negative marks on their credit report. They usually have been declined for credit recently, have creditors calling them and have multiple bills which they pay late or not at all.
Often there will be a home or vehicle which has been reposessed, or under the threat of repossession.
If you are experiencing debt problems such as these, then surely you are looking for relief. Not being able to pay your bills is stressful and truly exhausting.
If you are considering bankruptcy, it is absolutely critical that you discover the permanent ramifications of a bankruptcy listed below:
Bankruptcy laws were designed with you in mind. When you file bankruptcy, most or all of your debts will be resolved. This resolution is achieved after your assests are divided amongst your creditors. This is possible, through bankruptcy, even if your assets don't pay your debts in full.
The simple version of this procedure is known as liquidation, or Chapter Seven (7) bankrutpcy.
Chapter 7 bankruptcy is the most common type of bankruptcy. A "trustee" or government employee handles all the administrative and supervisory duties of the bankruptcy proceedings.
Once you initiate the bankruptcy proceedings, creditors can no longer attempt to collect your debts. Also, you will not be alble to transfer any assests that are part of the estate (so, forget about hiding your savings account or gold coin collection with a trusted relative or friend!)
Further, transferring ownership of assets prior to filing bankruptcy typically does not work, and many are invalidated.
(Recently, the U.S. Supreme Court ruled that retirement accounts do not have to be included in your assets that are liquidated)
Bankruptcy and your Credit Reports - Regardless of which bankruptcy you choose, it will typically remain on your credit reports for 7 or 10 years. Filing for bankruptcy frees you from your existing creditors, but not from any future creditors. Let me be clear:
A bankruptcy on your credit report will have a devastating impact on your credit score.
Some things to remember:
