Even when you are riddled with debt with no hopes of surfacing smoothly on the horizon, you think before opting for bankruptcy. One has to be completely sure before filing for bankruptcy, and consider all the outcomes of their decision. What are the conditions when filing for bankruptcy?
Bankruptcy is seen as a chance to start afresh. Getting your life back and taking back the control of your finances. If you are in huge debts, but are unsure of whether you are on the brink of bankruptcy or not, maybe these sure conditions for bankruptcy will make things clearer-
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1. You have tried and failed to negotiate with your creditors, again and again. Your attempts to negotiate or work a repayment plan with your creditor/s have been to no avail. They are not willing to reconsider your case- or agree to be paid out over time. They want full payments and you don't have the means to make that payment. In this case, you may consider filing for bankruptcy.
2. You are so over your head, that your liabilities exceed your assets. It is impossible for you to pay your debts as your monthly income falls short of even the interest of the debt. exceeds the monthly income they generate. This can be better explained with an example- a person has a debt of $1500,000 to a bank/institution and the monthly debt service is $12,000. If this individual has an income of $6000 per month, and has $300,000 in assets, then they may have no other option than to file for bankruptcy.
3. You want a fresh start with your IRA (individual retirement account) intact. As by the federal bankruptcy law your IRAs are saved from creditors.
If you match up with these conditions mentioned above, you can take the bankruptcy route. It is a complicated procedure and you must be guided by an expert. These are two sections under which you can file for bankruptcy-
* Chapter 7- Liquidation- This route is advisable for those who have few assets and little or no disposable income. It helps you discharge the debts and give you the chance to have a fresh start.
* Chapter 13- Reorganization- This route helps people unable to pay car loans or other mortgages. For stopping foreclosures and highly advisable for those with assets and a steady income.
Filing for bankruptcy is sometimes the right or the only choice, but this decision comes with certain consequences. These include:
1. You Won't Be Able to Borrow- When you have filed for bankruptcy, you will have difficulty in getting lines of credit (LOC), for up to several years. So this means no credit cards for a long time. Will you be alter your lifestyle and live without the plastic?
2. Your Credit Will Be Affected- This is a sure thing, your credit reports will be impacted when you will file for bankruptcy. In some cases, credit agencies can report a bankruptcy for up to 10 years. So, you will not be able to get a loan or have problems getting a job due to bankruptcy thing coming up in background checks.
In the present economic scenario, many households in the USA are dealing with huge debts. Be it the West Coast or the East Coast or the Mid West, messed up finances are the primary concerns for families and organizations. If you are in a similar situation, seek out help the right way. For those in the Mid West head to the metropolises in your state. For example, those in Illinois, can look for a good and reputable bankruptcy lawyer in Chicago. There is legal help and guidance quite close to you. Just make sure you find it!
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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