- How does filing bankruptcy help you?
The question as to how filing bankruptcy helps is very common today. If you are a debtor, you need to know everything about bankruptcy and how its affects you before proceeding.
Bankruptcy was established to help protect you as a debtor to get fair treatment from your creditors; therefore filing bankruptcy might be helpful depending on your situation. Although there are different types of bankruptcy proceedings, one chapter type may help you better than the other.
How does Chapter 7 and 13 bankruptcy proceedings help you? Let’s say you owe someone $1000, you are the debtor while the person you owe is the creditor. If you have non-exempt properties or assets, Chapter 7 of the bankruptcy protection can be helpful. How? Your non-exempt property or asset can be converted into cash or transferred in order to pay your creditors.
This takes place within a period of 90 days or more. After this process, you are free from most or even all obligation of debt repayment. It won’t cost you much for filing fees, together with your attorney’s fee; it’s very much affordable if you want to get out of financial crisis.
Chapter 13 works entirely in a different way; it’s more like a three to five years installment repayment plan. Unlike Chapter 7, Chapter 13 helps acquire protection for your properties or assets. So instead of creditors seizing you assets or garnishing you wages, you are giving duration of 3 to 5 years to come clean of all financial debts.
Chapter 13 is a better option when Chapter 7 won’t be beneficial or available for you.
Filing bankruptcy benefits you by giving you a fresh start in life. Although, it seems to affect your credit score later on but if you pay close attention to the timings you can reduce the consequences. So before filing for bankruptcy, you may want to talk to an attorney for more information on the benefits and effect of filing bankruptcy considering your situation, many lawyers give free consultation.
Please Note Chapter 7 is a “liquidation process” and nearly all of your possessions may be turned over to the Trustee. However you can keep certain assets such as you home and car up to a certain amount. You do not necessarily need to go to court; you may be required to attend the meeting of creditors, which usually take 5 to 10 minutes. If you’ve paid a certain amount to a creditor before filing bankruptcy, that money could be retrievable depending on the trustee. If you file Chapter 7 bankruptcy, it can only be available once more after eight or more years.
How does filing bankruptcy affect your credit rating:
Well, if you’ve filed for Chapter 7 bankruptcy, it may be reported for 10 years while Chapter 13 may be reported for 7 years. It’s very important to be skeptical when filing bankruptcy. Since everyone’s circumstances and conditions vary, Chapter 7 and Chapter 13 of bankruptcy protection can go a long way in helping you resolve your financial problems. Would you rather continue receiving harassments from creditors and financial institutions or file Bankruptcy Protection?
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