Bankruptcy Explained In Plain Words

Without proper money management and debt management measures and sometimes already in spite of of them, the final outcome is usually bankruptcy. But what exactly is Bankruptcy and what can you expect from it?

Filing for bankruptcy used to be a shared practice to bring ease to people’s finances easily and without effort at the expense of creditors. But since in 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act has been in force, bankruptcy filings have dropped dramatically.

The problem is that the new act has set the limits too high and few can now qualify for the relief bankruptcy provides already though no one would want to be in such situation.

Chapter 7 Bankruptcy and Chapter 13 Bankruptcy

There are two types of bankruptcies according to current legislation. The two processes are completely different and should be regarded as such. Chapter 7 bankruptcies provide a solution to extreme situations where the debtor can no longer repay debt and needs to get a fresh start.

This bankruptcy kind eliminates debt by canceling a portion of the noticeable debt with each creditor by method of the sale of the debtor’s assets.

Chapter 13 bankruptcy however, does not necessarily include the sale of assets. Instead, the debtor and the community of creditors with the aid of the court, negotiate new terms and establish a new repayment program which needs to be possible, affordable and economically viable both for the creditors and the debtor.

How About Filing for Bankruptcy on My Own?

By now you surely have heard: Why paying thousands of dollars on legal fees when you can file for bankruptcy on your own?. The question is, can everybody do so? Truth is that it can be done but a lawyer will probably save you a lot of hassles and probably money too. Legal experts are familiar with all technicalities that can provide you with greater financial ease.

additionally, the new bankruptcy law requires that you get credit counseling before processing your bankruptcy forms. consequently, you will already be familiar with your situation and possibilities and have enough information then to decide whether you need legal assistance or not if bankruptcy is your only choice.

In any case, you should always contact an attorney if you are not sure about how to get by this course of action.

Foreclosure Is a Risk, Be Protected

Your mortgage can endanger your character if you fail to repay it. Financial failure may imply that you loose your character to foreclosure. If you are threatened in any way by your mortgage loan lender, if you receive notification of possible foreclosure or already if you think that something is going on because the lender is not trying any more to retrieve the investment, you should contact a lawyer closest. There are foreclosure attorneys specialized on these issues that will be able to assist you in keeping your character if at all possible. Just remember that when it comes to this issue, time is of the essence.

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