Monday, 7 January 2019

5 Things Should Know About Bankruptcy

These are five facts that you should know when it comes to considering bankruptcy, now there's one thing I should tell you because we are talking about bankruptcy I am not an attorney but when it comes to considering bankruptcy if you want to find out more information regarding bankruptcy consult with your local bankruptcy.

Bankruptcy usually has an annotation to it, bankruptcy is usually considered by individuals that are suffering from medical debts from illnesses, divorce or maybe even an unexpected job loss but basically bankruptcy gives the opportunities to people or businesses to start over financially, according to, bankruptcy is basically the process in which a judge or a court trustee takes a look at the financials of an individual or a business because they're not able to pay their bills and determines whether to discharge that so that they legally are not required to pay those debts again.

Going back to my other reason being able to start over financially, when it comes to that there are actually five things that you should know before considering bankruptcy and moving on with talking to your local bankruptcy attorney. So 

1. There's More Than One Type Of Bankruptcy

There's chapter 7 and chapter 13, which is typically what consumers pick, a chapter 7 bankruptcy is usually considered as the liquidation option it usually forgives the most unsecured debt, personal loans, and credit cards. However, chapter 13 bankruptcy is usually called as a reorganization option is basically you set up a payment plan over time to your creditors, this process can take anywhere from three to five years but it does require you to have a regular steady income so that you can start making those payments over time.

2. Your Creditor Will Suffer

It's important to keep in mind that your creditor will be affected, there are long-term penalties for moving forward with bankruptcy and this can stay in your credit report from seven to ten years because 35% of your score is from payment history alone like I mentioned before your credit will be affected this can make it difficult when it comes to appliance or credit card mortgages or even loans. If you move forward and you're trying to apply for employment and it asses you if you've ever considered or declared bankruptcy, you will have to put that in there for the rest of your life

3. Not All Debts Discharge

Not all debt is discharged during the bankruptcy and some of them will remain on your credit profile, what that being said there are alternatives that you can consider for these types of account, 

  • Being debt elimination strategies
A debt elimination strategy gives you the opportunity to organize your debts and set up a payment plan over time ultimately eliminating all of them. One thing that I suggest that you can do is basically organize your balances from minimum to the highest balance and start off with the smallest balances so here create some sort of a snowball effect again going across all your debts eliminating them

  • A loan refinancing
Loan refinancing gives you the opportunity to rig it and renegotiate your terms in the form of a loan this way you can ultimately pay them down completely

4. Bankruptcy Cost

One thing to consider is that bankruptcy costs money in a chapter 7 bankruptcy, one of your biggest expenses are going to be the attorney that you hired, fees can range from a set flat fee or even base on the amount that you owe but it does vary by the attorney you can expect to pay anywhere from hundreds of dollars to even thousands of dollars but keep in mind that there's a fee waiver that you can apply for and if you approved that can save you up some money. In a chapter 13 bankruptcy, because it takes a longer period of time it's going to cost you a lot more to complete that type of bankruptcy

5. The Upside

There is a positive side to things. although being bankrupt is not the most positive experience, it gives you that ability and opportunity to start back over again, so take this time to reflect on your bad habits from before regarding your financial decisions, take a look at them and learn from them and now since you're given the opportunity to start back up again, try to tighten up on your habits

I hope you like the information that you read in this article, leave a comment if you have anything to say.

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