Lesser-Known Facts About Bankruptcy And How It Benefits The Cash-Strapped Ones

Lesser-Known Facts About Bankruptcy And How It Benefits The Cash-Strapped Ones Filing for bankruptcy is like pushing the rest button of your finances. Filers have a history of fresh starting their lives with a new set of liabilities and benefits. If you are seriously considering bankruptcy, you will want to learn about these 14 factors before you really go out to file for it.

There’re two bankruptcy types commonly preferred – Chapter 7 enables you to walk away from most of your debts. This option is utilized by those who have a piling debt and income is too low to pay any debt off after covering their basic expenses. Chapter 13 allows you to draft a repayment plan which basically spans over 3-5 years until most of your debts are repaid.

Consumers never tend to frivolously use bankruptcy People consider bankruptcy when they are faced with major life events which significantly hamper their income and increase their bills. The commonest reasons why people consider bankruptcy include: unemployment, medical bills and divorce. In 60 percent cases, medical bills are the most common problem.

Filing for bankruptcy as well stops (well, temporarily) foreclosure and debt collection attempts. If you are unemployed or re-employed recently, however facing foreclosure because you missed a few payments in the past months, chapter 13 bankruptcy makes an ideal choice based on your situations.

Chapter 13 bankruptcy will save your home. When you are able to pay your mortgages with your salary, Chapter 13 allows you to repay your debt based on that similar salary, but over the course of 3-5 years.

Your house does matter When it comes to which property you would want to hold onto in bankruptcy, rules vary from one state to another. Also, expense and income limits that are used to determine whether you qualify for chapter 7 or chapter 13 bankruptcy varies depending on filer’s location. Last, but not the least, your attorney’s fees will also vary based on where you live.

You can expect to keep your assets Filing bankruptcy never means giving up all your assets and possessions. You are certainly allowed to keep your personal belongings, such as electronics, clothes, household furnishings and other exempt

items. Based on your state law for bankruptcy, the debt pattern, the type of bankruptcy you go ahead with – you can sometimes keep larger assets, for example a family home and cars.

Chapter 7 and Chapter 13 make very different tools If you had been out of work or got behind on your house mortgage payment, however now you can meet your house mortgage, chapter 13 bankruptcy makes an ideal choice for you. In case you do not own a house, but are slapped with medical bills, then chapter 7 bankruptcy is your choice. Just like any significant financial decisions, you will be expected to gather information. Note down the properties or assets you want to save and what how you want to benefit from filing bankruptcy. When you speak to an attorney, go through that list and make sure none of the bankruptcy types are impacting your ‘wants’ and ‘needs.’

Be sure to qualify for chapter 7 bankruptcy Filers should show through their income and expense both, so the trustee or attorney can easily look through whether or not you’re capable to repay your debts before filing for bankruptcy. However, in case, bankruptcy remains as the last resort, make sure you qualify for chapter 7.

Bankruptcy is neither cheap nor expensive Your expense depends on how you choose to proceed with your bankruptcy filing. First of all, know the laws of bankruptcy in your state. Try to understand as much as you can before approaching an attorney.

An attorney is a highly professional individual who will start digging through your finances and your capabilities to repay the debts right after you approach them. The fact is, bankruptcy is a complex process with multiple phases and stages to analyze your financial stand in life. You should know your current financial stance in life before you decide to pay any little amount to an attorney just to tell you ‘yes’ or ‘no.’ Either you are totally blank about whether or not should you file for it or you know you want to file for it. Your attorney fees will vary depending upon the length of work they have to do to put you in a relieving situation.

Bankruptcy does not make your credit look any worse If you’d been facing financial problems already, filing bankruptcy wouldn’t have much effect on your current financial status. In fact, filers have seen their credits improve over years after bankruptcy. Also, you can be considered for FHA loan in about a year or so after Chapter 13 bankruptcy and about two years after chapter 7 bankruptcy.

However, all these processes involve complexity; and, analytical skills are required to ensure success. If you are considering bankruptcy, you must do a research on your own before consulting an attorney. A bankruptcy attorney is a must, for they know where to start and when to close.

Recovery Law Group is one of the largely trusted consumer protection law firms in the U.S.A. They make an ideal choice for you to consult a bankruptcy attorney to look into your circumstance.