The Facts About Bankruptcy:
Please click on the statement that most accurately describes your current situation:
What is Bankruptcy and how does it really work?
Bankruptcy is the "end of the line". A declaration of bankruptcy forces all commercial creditors to cease and desist from attempting to collect the debts owed them; it stops wage garnishment, reverses judgments, and generally wipes out the debts, depending on which form of bankruptcy is declared.
For some people, bankruptcy is the only realistic option. If you owe $50,000 in debts, and you'll never earn more than $1,000 per month, then you need to consider it. But judging from the record number of bankruptcy filings during the past few years, it has become very popular option among many people. In fact, so many people have filed personal bankruptcy lately - more than 1.4 million in 1998 alone - that Congress is working on legislation that will make it tougher to file.
There are two forms of personal bankruptcy: Chapter 7, usually called "straight bankruptcy," and Chapter 13, usually called "consolidation bankruptcy" or "the wage-earner's plan." This is definitely the least desirable type to file, since under this approach you end up paying back most of the debts over a three to five year period anyway, plus you have the bankruptcy on your credit history for ten years. There are certain unique circumstances that would point a person toward a Chapter 13 type of bankruptcy, but the majority of people file the Chapter 7 bankruptcy.
Basically, the way it works is that certain personal property is treated as "exempt," meaning your creditors cannot touch that property in attempting to recover the money you owe them. An automobile, a certain amount of home equity, personal effects like clothing, and some other assets, are usually considered exempt, although the exact details vary from state to state. Any property that is not exempt is liquidated and distributed to the creditors under the supervision of the court. Since most people entering bankruptcy have only exempt property anyway, there's usually nothing left to distribute, so the creditors typically get nothing.
Unfortunately, it's too easy to file bankruptcy in this country. Many people mistakenly view it as a way to "start over". There are financial down sides associated with bankruptcy that make it a very bad solution for most people. (The cost of filing bankruptcy itself is minimal. Depending on what state you live in, and depending on how much your attorney charges to perform the service, you can expect to pay anywhere from $300 on up to $1,500 for the whole process.)
So what are the financial down sides? Simple: You will pay EXTREMELY high interest rates on purchases that you make later in life. The bankruptcy stays on your credit file for ten years. Let's say you want to buy a house three or four years after having filed bankruptcy. If you're in good enough shape at that point to qualify for a mortgage, you'll be able to buy the house easily enough. The problem is that you'll pay a higher interest rate than the average consumer who has never filed bankruptcy.
However, it may be the best solution to your particular problem. If you have no choice, then you should proceed with a clear conscience. But the majority of people who take this option really don't know what they're getting themselves into. They are desperate, and they get talked into filing bankruptcy without understanding the hidden costs in their financial future.
Just remember:
1. Most personal bankruptcies are completely unnecessary, since there
are usually better options available.
2. Many consumers are forced, against their wishes, to file bankruptcy to
protect themselves from aggressive creditor tactics.
3. Bankruptcy still means FAILURE to most people.
I am behind in paying my financial obligations and the bill collectors are threatening to take my house, car, etc. You should call a local attorney to discuss your options, if your outstanding debts are secured or you have assets you need to protect, than bankruptcy may be your best step.
I was unable to pay my debts several years ago and they won't go away, I am thinking about filing bankruptcy to get a clean slate. If none of your creditors are trying to collect from you there is no need to file bankruptcy! If the debts are less than two years old we would recommend settling them, if they are older than two years we can eliminate most of them and settle the rest. This is the fastest way to "make them go away"!
I just filed bankruptcy can you fix my credit reports? At this time it is somewhat unlikely to remove the bankruptcy information from your credit reports, however, we can get all the accounts listed with a -0- balance( if the BK was a chapter 7), and non-rated. It would be best for you to have no contact with your creditors for about two years and then contact us for our removal services. But if you need to use credit anytime soon, then our service is your best bet to get your reports in the best shape they can be in.
I filed bankruptcy several years ago, is there anyway to remove it from my credit report before the 10 years is up? Absolutely! If your bankruptcy has been discharged for two years or more we have an 85% removal rate. You don't have to wait 10 years anymore, enroll today!
Bankruptcy is a very serious issue and should only be filed for if there is no other way out of your current situation. If your creditors are NOT hounding you and threatening you with liens, judgments, or wage garnishment, there are several viable alternatives to bankruptcy. Such as debt settlement, or possibly a consolidation loan if you have equity in your home. Please contact us by telephone or e-mail and let us see if we can't find a better way for you to go than to bankruptcy court!
If you have already filed a chapter 7 or 13 bankruptcy be of good cheer! We have great success removing bankruptcy entries and the accounts that were listed in the bankruptcy.