As one piles up more debts, there will be the temptation to file for bankruptcy. The decision could leave the person feeling confused and hopeless. There are however various other options before one decided to take that step. Filing that one is bankrupt might help in starting over but the decision must never be taken on a light note. In considering filing for bankruptcy CA residents ought to be versed with what is involved.
There is more than one type that one can opt for. Each of the types has its restrictions and outcomes that are different. Chapter 7 bankruptcy is also called liquidation. When one files for this, they will allow debtors to discharge most of their debts. It requires a debtor to liquidate or sell most assets so as to pay what they owe.
The other option is called chapter 13. This will allow one to reorganize debts all over again and pay creditors over an agreed period of time. The entire process might take 3 to 5 years. The assets that belong to the debtor are not liquidated and should there be additional debt owed after required payments are made, they are to be discharged. Not everything will be discharged though. Even when a person filed for chapter 7, they are not forgiven everything. Some debts are not discharged.
Debts that cannot be discharged include student loans, child support, most taxes and real estate liens. In addition to that, it is possible for debtors to oppose discharge of debts that they are owed. If they file their opposition and win, you will still be owing the money. Income of an individual matters when they are filing that they are bankrupt.
While all people can file that they are bankrupt, income could disqualify one or affect what they can file for. For instance, some people cannot file for chapter 7 owing to what they earn. For people who file for chapter 13, their income will influence and determine how debt restructuring is done. It is also not free to file. One will need to hire an attorney to oversee the process, further adding to the costs. The fees of attorneys might be added to the bankruptcy filing. Chapter 13 filing is costlier since the process takes much longer.
Bankruptcy will destroy your credit. The payment history affects 35 percent of credit score of the individual. Therefore, when one decides to file that they are bankrupt, it will have lasting effects on their ability to get loans or utilize credit. The information will stay on credit for 10 years or so. During that time, landing some jobs or getting credit cards will not be easy. Also, the filing is made public.
Filing that one is bankrupt does not solve all problems. Most of the time, people become bankrupt because of poor financial decisions. As such, the same problems might still persist even after they have successfully filed that they are bankrupt.
There are different options you can opt for. Negotiation of debts with creditors is an option. Some people also prefer debt consolidation.
There is more than one type that one can opt for. Each of the types has its restrictions and outcomes that are different. Chapter 7 bankruptcy is also called liquidation. When one files for this, they will allow debtors to discharge most of their debts. It requires a debtor to liquidate or sell most assets so as to pay what they owe.
The other option is called chapter 13. This will allow one to reorganize debts all over again and pay creditors over an agreed period of time. The entire process might take 3 to 5 years. The assets that belong to the debtor are not liquidated and should there be additional debt owed after required payments are made, they are to be discharged. Not everything will be discharged though. Even when a person filed for chapter 7, they are not forgiven everything. Some debts are not discharged.
Debts that cannot be discharged include student loans, child support, most taxes and real estate liens. In addition to that, it is possible for debtors to oppose discharge of debts that they are owed. If they file their opposition and win, you will still be owing the money. Income of an individual matters when they are filing that they are bankrupt.
While all people can file that they are bankrupt, income could disqualify one or affect what they can file for. For instance, some people cannot file for chapter 7 owing to what they earn. For people who file for chapter 13, their income will influence and determine how debt restructuring is done. It is also not free to file. One will need to hire an attorney to oversee the process, further adding to the costs. The fees of attorneys might be added to the bankruptcy filing. Chapter 13 filing is costlier since the process takes much longer.
Bankruptcy will destroy your credit. The payment history affects 35 percent of credit score of the individual. Therefore, when one decides to file that they are bankrupt, it will have lasting effects on their ability to get loans or utilize credit. The information will stay on credit for 10 years or so. During that time, landing some jobs or getting credit cards will not be easy. Also, the filing is made public.
Filing that one is bankrupt does not solve all problems. Most of the time, people become bankrupt because of poor financial decisions. As such, the same problems might still persist even after they have successfully filed that they are bankrupt.
There are different options you can opt for. Negotiation of debts with creditors is an option. Some people also prefer debt consolidation.
About the Author:
You can get great tips for selecting a bankruptcy CA lawyer and more information about a well-respected attorney at http://www.centralcoastbankruptcy.com now.
No comments:
Post a Comment