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.
It is common for there will be a home or vehicle which has been repossessed, or under the threat of repossession.
If you having problems such as these, then you are searching for relief. Not being able to pay your bills is stressful and humiliating.
If you are considering bankruptcy, it is absolutely critical that you discover the permanent ramifications of a bankruptcy.
Bankruptcy laws were designed with you in mind. When you file bankruptcy, most or all of your debts will be resolved.
This happens after your assets are divided amongst your creditors. This is possible, through bankruptcy, even if your assets don’t pay all your debts.
This procedure is called liquidation, or Chapter Seven (7) bankruptcy. Chapter 7 bankruptcy is the most common type. A “trustee” takes care of all the administrative and supervisory duties of the proceedings.
Chapter 11, 12, or 13 Bankruptcy offer rehabilitation to your business, and the option of using future earnings to pay creditors. Once you initiate the bankruptcy proceedings, creditors can no longer attempt to collect your debts.
In addition, you will not be able to transfer any assets that are part of the estate. You will not be able to hide your savings account or gold coin collection with a trusted relative! And, transferring ownership of assets before filing bankruptcy typically does not work, and many are invalidated.
Recently, the Supreme Court ruled that retirement savings do not have to be included in your assets that are liquidated.
Bankruptcy on your credit reports regardless of which bankruptcy you choose, will remain on your reports for 7 or 10 years. Filing for bankruptcy frees you from your existing debts, but not from any future debts.
If you do decide to file bankruptcy, it will narrow your options. Good credit is possible to restore, but it will take some time and considerable patience.
Things to remember:
1. Any bad credit item can potentially be removed from your credit report.
2. New, current good credit will cause your score to improve.
3. Old, derogatory credit falling off your report will also boost your score over time.
4. You must monitor your credit reports regularly – and dispute questionable derogatory marks such as charge offs, collection items, and late payments.
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