Personal Bankruptcy Issues


(Understand that Bankruptcy Relief Network would never recommend filing of bankruptcy to anyone. However, in some extreme cases, it may be necessary. Always seek a professional opinion before you consider filing. You may be able to save yourself from a permanent black-mark on your credit.)

Personal bankruptcy is a procedure that allows people who are suffering from grave financial difficulties to start fresh. For many people, making the decision to file for bankruptcy is a life changing step. We at Bankruptcy Relief Network really cannot stress enough that it should be a final resort.

Personal bankruptcy is actually defined in two different ways:

The first kind of bankruptcy, known as Chapter 13, reorganizes your debt while allowing you to keep things that might otherwise be repossessed, such as a mortgaged home or a car tied to a loan. Chapter 13 often allows a person to pay off a defaulted debt in three to five years, as opposed to giving up personal property.

The second kind of bankruptcy, known as Chapter 7 bankruptcy, is a less popular form of bankruptcy, as it ensures that you must liquidate all of your assets, except those that state law permits. Although it varies from state to state, exempt items may include work related tools, basic furniture and other similar "necessity" items. With Chapter 7, your personal property can either be sold by a court appointed representative or turned directly over to your creditors. Because this is a severe form of bankruptcy, it is not possible to file for Chapter 7 more than once in a period of six years.

Effective, But At Great Cost
Both Chapter 7 and 13 bankruptcy may eliminate unsecured debts (such as that from medical bills and credit cards) and stop harsh actions such as foreclosures, garnishment of wages, asset repossession and the shut off of essential utilities. As well, both bankruptcy types will provide some exemptions, which vary from state to state.

The worst facet of bankruptcy is that it not only does it not wipe out a bad credit history, it also makes your history much worse. In most cases, it makes obtaining a mortgage very difficult. Obtaining credit cards, for obvious reasons, is often prohibited. And one critical issue for many is that bankruptcy never eliminates such payments as child support, alimony, government student loans and taxes.

If you are filing for bankruptcy, you must go to federal court and pay a filing fee, which is sometimes more than $160. This fee, of course, does not include attorney costs. Attorneys are a real help during bankruptcy proceedings, and attempting to file without one is a very dangerous move.

The fees for bankruptcy attorneys vary widely from jurisdiction to jurisdiction. Consider all attorneys very carefully, as levels of service vary along with costs. Choose carefully, as this decision will be critically important to your life.

If you are considering bankruptcy, please consult with a Bankruptcy Relief Network representative first. We may be able to save you from bankruptcy. Contact us here.

Bankruptcy Relief Network
501 W Broadway Plaza A
San Diego, CA
(619) 599-0316

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