Bankruptcy

"Upgrade Your Credit!"

Click here to receive this free guide instantly by e-mail (delivered in seconds).

Bankruptcy

If you are in debt, you probably have contemplated filing for bankruptcy. Filing for bankruptcy may seem like a quick fix, but there are long term consequences that will affect your credit and privacy.

Possible future events that might be affected by a bankruptcy are the renting of a home or an apartment, seeking employment and having to pay higher interest rates on credit cards, mortgages and loans. Plus, a bankruptcy statement will be placed on your credit report for up to ten years and a bankruptcy becomes public information.

Understanding Bankruptcy

Filing for bankruptcy may get rid of your unsecured debt (ex: credit cards) and stop a foreclosure, repossessions, garnishments, utility shut-offs and all debt collection activities.

Individual Consumers Have Two Options

Option 1: Chapter 13 Bankruptcy

Chapter 13 bankruptcies are debtor rehabilitation proceedings. The court

mandates that a repayment plan be designed for the consumer to repay as much

of the debt as possible, over 36-60 months.

Option 2: Chapter 7 Bankruptcy

Chapter 7 bankruptcies are straight bankruptcies. Once your petition is approved,

all court stated non-exempt assets are sold to satisfy your debts. All allowable

debts are discharged and there is no repayment plan. A Chapter 7 bankruptcy

may only be filed once every seven years.

Debt That Is Exempt From Bankruptcy

Student loans, alimony, child support, income taxes and fines.

Bankruptcy Reform Is Here

The bankruptcy reform bill will push debtors into Chapter 13 (where you pay back a portion of your debt) rather than Chapter 7 (where your unsecured debt is canceled).

Frequently Asked Questions

Q: How long will a Chapter 7 bankruptcy remain on my credit report?

A: A Chapter 7 bankruptcy will remain on your credit report for ten years from the

date of filing, even if it was dismissed or discharged.

Q: What are the alternatives to bankruptcy?

A: Click here for a list.

Q: I am receiving letters that say I can stop creditor calls, foreclosure, repossession,

tax levies, any garnishments by wiping out my debt. What is this?

A: Usually, these letters are from attorneys that are looking to file bankruptcy for you.

Q: When is bankruptcy a good idea?

A: When all else fails and there are absolutely no other options.

Q: How is my credit after bankruptcy?

A: You have no usable credit.

Additional Information

For more in depth information, including sample letters, forms, tips and step-by-step detailed information, please click here to reach our free publications page.