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