File Bankruptcy To Eliminate Your Debts

Filing for individual bankruptcy is not an easy thing to do and normally its done as a last measure

. In today's world, it brings humiliation and a stigma that can literally destroy the psyche of a few. But, from time to time, circumstances leave you with no other choice than to file for bankruptcy.

Whenever you declare personal bankruptcy in the U.S., you normally are choosing between two distinct types of filings - Chapter 7 or Chapter 13. According to statistics, most people end up filing for Chapter 7 personal bankruptcy. Under Chapter 7, the court will liquidate certain of their assets and give the money derived from them to the lenders. In turn the debt to the lenders will be deemed paid.

If you have a reliable job and are getting a steady income, you may be better off filing under Chapter 13. The benefit in filing this way is that you can maintain your assets. In return, however, you'll be expected to enter into an agreement with the courts whereby you are required to pay off your debts within, at most, a 5 year period of time. But regardless of what type of filing you decide to do, the report of the bankruptcy will still be reflected on your credit rating.

In the event that you have a legal professional, he will let you know what documentation you need as well as when and where to show up for your court date. Typically you will be required to show evidence of your current assets, income, expenses, and debts (secured and unsecured). This consists of things such as tax statements, utility bills, bank statements, credit card bills, mortgages, and the like. Be sure you bring everything so the court has every piece of information it needs to make a determination of your case.

When you apply for personal bankruptcy, the hope is that you'll get a fresh start by having all of your bad debts discharged. There are some obligations, however, that the courts typically will not discharge. For instance, when you have back taxes, it's extremely unlikely that they will be discharged. Additionally, it is unlikely that child support debts will be discharged. The best idea is to speak with your lawyer before beginning individual bankruptcy proceedings. After checking out your financial data he will be able to give you a good idea of what obligations you will be left with after the bankruptcy goes through.

In the event the court approves your bankruptcy request, it will decide which of your debts will be discharged and which ones will remain on the books. The court will also notify your debt collectors of your bankruptcy status. The court will also decide which of your assets you can preserve. The assets that you can not keep will be sold or auctioned off to raise revenue for the creditors. What you can and can't keep differs from state to state. Your bankruptcy attorney can tell you what the rules are in your individual state.

Choosing to file for bankruptcy is not an easy choice to take. Because of the stigma attached to it, many people are deathly fearful of bankruptcy. However, in many cases, it's the best choice to make - both economically and psychologically.

by: Lane Helmer

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