Declaring Bankruptcy by GuzelKharunova


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									                   Declaring Bankruptcy: Chapter 7 vs. Chapter 13

      The collection agencies are hounding you relentlessly. The calls keep
coming in at all hours, your making the best effort to meet the obligations of your
various creditors, and you are scrambling to make ends meet. Despite your best
efforts, your finances are simply upside down and you are considering declaring
bankruptcy. You are aware that it can provide relief and allow you to restructure
your debt and settle obligations with the bankers, but is it right for you?

  When you are facing the decision to file for bankruptcy it can seem like
financial weight of the world is lined up against you, and in some cases upside
down obligations and high interest rate debt is. Going bankrupt, often first
encountered in our youth after a hard fought session of Monopoly, is not the result
anyone seeks after pouring so much blood sweat and tears into their fiscal
endeavors, but going bankrupt can provide a second chance opportunity to press
the reset button on your money matters.

        What You Need To Know About Bankruptcy Before You Declare

   Filing for bankruptcy has consequences. The acknowledgement that you can no
longer pay your bills has an obvious impact on your credit reputation for years to
come and can pre-disqualify you for future borrowing opportunities. I understand
fully that in this present moment, crushed by debt, future borrowing is the last
thing on your mind but bears taking a moments consideration. Going bankrupt is

the single most damaging thing you can do to your credit history and will remain
on your consumer credit reports for 7 to 10 years.

      There are a variety of alternatives that should be explored before you decide
to file to eliminate your debts. For example, there are often opportunities to
restructure your debt through consolidation loans, negotiation with your creditors,
or to get your finances back on their feet through downsizing and or asset
restructuring. The credit impact is that serious, that you will want to be sure that
you have explored every possible alternative to declaring bankruptcy.

       If having been forewarned, filing still remains your chosen path, the court
system provides the following options.

                              Chapter 7 Bankruptcy

    The Chapter 7 is the most common method of going bankrupt, as it can
provide the fastest results and is open to be filed by individuals, corporations,
married partners, and partnerships. A Chapter 7 is sometimes referred to as a
straight bankruptcy and filing begins a court appointed asset managed liquidation

    After filing you, as the debtor, turn over all property to the court appointed
trustee to liquidate into cash in order to pay off your lenders with the proceedings.
Following the liquidation of your assets, you will receive a discharge of your debts,
typically within a four month period. Following your debtors discharge you have

been given a fiscal fresh start to proceed without the onerous fiscal obligations that
were crushing you prior to filing. It is important to note that federal, or tax debts
are not possible to discharge through bankruptcy.

      The Chapter 7 bankruptcy code also provides for a number of asset
exemptions that are deemed 'exempt' under Federal and State exemption laws,
meaning that you get to keep these assets. Don't be confused, if you owe any
money for these assets, like your primary car, your primary home, or other assets
that your particular state deems exempt, you will still be obliged to make the
payments if you choose to accept the exemption. The assets that are exempted vary
from state to state, so check your local laws to confirm what will potentially be
protected from your Chapter 7 Bankruptcy.

                                 Chapter 13 Bankruptcy

   A different declaring option that is available is the Chapter 13, known as the
reorganization bankruptcy. In this case the filer has wishes to pay off their indebted
obligations over a period of three to five years. This is an ideal solution for people
declaring bankruptcy who wish to protect non-exempt properties while providing
opportunity to restructure the terms of obligations that cannot be met as contracted.
A Chapter 13 is typically an option chosen by people with a predictable revenue
that will allow them the financing flexibility in the coming years to pay off their
debts. More information about declaring Bankruptcy you can find here

                          Do I Qualify To Go Bankrupt?

   There are a few qualifications that must be met in order to file to go bankrupt.
Firstly, if you have declared Chapter 7 bankruptcy previously, within the last 8
years, you are prevented from refiling until that period is exceeded. In the case that
you had filed for Chapter 7 within the last 8 years but are in dire need of debt relief
again, you can file for the more stringent Chapter 13.

The following debts are not available to be discharged and so, if they are the
primary reason for your considering filing, dissuade you:
            debt for trust fund taxes
            Criminal restitution
            taxes for returns that were never filed or filed late (within 2 years of
the petition date)
            domestic support payments
            taxes for which the debtor made a fraudulent return or evaded taxes;
            Student loans
            Drunk driving injuries
            Civil restitutions or damages awarded for willful or malicious
personal actions causing personal injury or death

                        Rebuilding Your Credit After Bankruptcy

     Following a successful discharge of your debts through a bankruptcy filing,
you can rebuild. In fact, the federal code that allows you to go bankrupt is intended
to provide you a second chance, financially speaking, after being entangled in
unmanageable debts. Filing for bankruptcy, and the subsequent successful
discharge of your fiscal obligations gives you an opportunity to gain lasting debt
relief within a 3 to 5 month period and say goodbye to the harassment of credit
collection agencies for good. With time your credit score will improve, bankers
will begin to work with you again, and borrowing is not ruled out forever. Get your
financial house in order, and re-enter the marketplace with all the additional
experience and fiscal wisdom having suffered through a bankruptcy can provide.

      For more information on how to maximize your savings when declaring
bankruptcy click here


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