Jumat, 23 Maret 2012

File Bankruptcy and Take Control of Your Debts

Expert Author Bob P Jones Millions of Americans file bankruptcy each year, so why is it that many people still see bankruptcy as a failure? Corporations file bankruptcy as a way to restructure and reorganize coming out of bankruptcy leaner and stronger. This is perfectly acceptable but personal bankruptcy still carries a negative stigma for many. In today's tough economy many people are in the situation where filing bankruptcy is a serious option to alleviate overwhelming debt. The thing to keep in mind is that if your unpayable debt is beginning to affect your life, your health, your family, as well as your credit rating, then filing bankruptcy just may be the wisest decision to regain control of your finances. Filing bankruptcy truly puts the control in the hands of the debtor, which can be a welcome change after being hounded by angry creditors making unreasonable demands or threats for money. This is because when a person decides to file bankruptcy, it sends a clear message to their creditors that they have made every attempt to pay back their debt but are unable to. It also tells the creditors that the individual is turning to the legal system for the protection that bankruptcy offers them. Filing bankruptcy has many advantages for an individual that has been struggling to keep their head above water. To begin with, once the bankruptcy petition is filed with the court, the automatic stay is put in place. The automatic stay legally prohibits debt collectors not only from harassing you but also stops all collection attempts completely. This includes lawsuits that are already filed, judgments, wage garnishments, and even foreclosure proceedings. With the assistance of a bankruptcy attorney the bankruptcy process can even protect many financial assets and personal property including one's home. The two most common chapters of personal bankruptcy filed are Chapter 7 and Chapter 13 Bankruptcy. Which chapter of bankruptcy that one should file is best left to the expertise of the bankruptcy attorney. There are several factors that determine eligibility for bankruptcy and the chapter filed which is why an attorney is invaluable when filing. In a nutshell, a Chapter 7 Bankruptcy eliminates all unsecured debts such as credit cards, personal loans, and medical bills. It is not common for the debtor to lose assets in the process, unless they choose to give them up, due to exemption laws that protect personal property. A Chapter 13 Bankruptcy differs in that it is a repayment plan set up over the next three to five years where the debtor pays back the debt. The secured debts get priority in the payment plan with the unsecured debts getting anything left over after all else is paid off. If there are any unsecured debts left at the end of the scheduled payment plan then they are eliminated in the Chapter 13 discharge. The bottom line is that with either chapter of bankruptcy filed, the debtor has the peace of mind that they are protected under the legal system while they attempt to take control of their life and finances. At the end of either chapter of bankruptcy the debtor will emerge debt free and ready for a fresh start.