| A lot of people are running into financial difficulty | | | | currently possess will need to be listed, by |
| these days - especially with a lot of major | | | | requiring you to take a "means test," and then a |
| corporations going through layoffs and buyouts. | | | | decision will be made as to what you can keep |
| What this means is that a lot of people find | | | | and what you cannot. Everything will fall under an |
| themselves suddenly unemployed and it may take | | | | "exempt" or a "non-exempt clause." You keep the |
| some time to get another good paying job. When | | | | "exempt" items, and lose the rest. The |
| financial difficulties come, and they stay around | | | | "non-exempt" items will either be sold, or you will |
| for awhile, the thought of declaring bankruptcy will | | | | be required to pay them back. Some things that |
| come into some people's minds - especially when | | | | are not exempt are child support and education |
| the debt starts getting out of hand, with no light | | | | costs. |
| at the end of the tunnel. Here are some thoughts | | | | The cost for declaring bankruptcy can run up to |
| about bankruptcy that will help you to make that | | | | about $1,500 for personal bankruptcy. This |
| important decision of "Should I, or shouldn't I?" | | | | includes the filing charges, and the lawyer's fees. |
| What Declaring Bankruptcy Means | | | | The fees, however, are dependent upon how |
| Declaring bankruptcy is basically an indication that | | | | much of an income you have, and it will vary |
| you are not able to pay the debts that you have | | | | from one state to another. The process of |
| legally incurred. For this reason, and the legal | | | | obtaining a legal declaration of bankruptcy, |
| examination of your bills and the way you handle | | | | assuming everything is in order, can take up to |
| your finances, as well as the humiliation involved, | | | | six months. |
| makes it a rather stressful process. It means that | | | | After The Declaration Of Bankruptcy |
| you will have to seek credit counseling, too. | | | | Once you have obtained a legal declaration of |
| Because so many people are attempting to get | | | | bankruptcy, all of your creditors know where |
| out of their debts, for one reason or another, | | | | they stand. For some, the debts are discharged, |
| Congress has passed an Act, which was signed | | | | and others have received what will be paid to |
| by President Bush in 2005, to place certain | | | | them, or they know what will soon be coming to |
| limitations on declaring bankruptcy and who can | | | | them. However, it also means that your credit |
| do it. This Act, called the "Bankruptcy Abuse and | | | | rates have been destroyed, and it will take years |
| Consumer Protection Act," seeks to make it | | | | to fully repair it. The bankruptcy is placed on your |
| more difficult to declare bankruptcy and to help | | | | credit rating and will remain there for the next ten |
| the creditor to receive a higher degree of | | | | years. |
| compensation. This Act called for higher | | | | What Other Options Are There? |
| bankruptcy filing fees, credit counseling, and | | | | If you are now in a position where you need to |
| making it more difficult to file under Chapter 7, | | | | consider bankruptcy, then there are some other |
| making it necessary for more people to file under | | | | options that may yet be available to you. |
| Chapter 13 bankruptcy. Many other details are | | | | 1. Get Credit Counseling |
| also covered in the Act that place further | | | | By this, it means work through a debt negotiation |
| limitations on bankruptcy. | | | | company who will take your case to the various |
| Two Types of Bankruptcy | | | | creditors in an attempt to work out some kind of |
| Filing under a Chapter 13 bankruptcy means that | | | | a deal. This could be a good step in the right |
| there is a "reorganization" of your finances, and it | | | | direction because creditors know that if you |
| does mean that you do repay much of your | | | | declare bankruptcy, then they may not get |
| existing debt. You are required to make a plan | | | | anything. Oftentimes, they will work with you. |
| that enables you to pay back a lot of your | | | | 2. Renegotiate Your Loans |
| existing debt in the next three to five years. This | | | | Once again, by talking with your creditors, you |
| means the sale of some of your properties (or all | | | | may be able to renegotiate for better loan terms. |
| of them) in order to satisfy the debt. It is the | | | | This could give you a greater leeway financially |
| bankruptcy Trustee who will make the decision as | | | | that could provide just enough of an edge to |
| to what needs to be sold - not you. | | | | enable you to get through it with having to |
| Filing under a Chapter 7 bankruptcy means, once | | | | declare bankruptcy. |
| again, that the various assets that you do | | | | |