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bankruptcyGiven the way the economy of the United States has been shaped over the last few years, bankruptcy is not uncommon and there have been millions of individuals as well as company who have sought refuge under Chapters 7 and 13 of bankruptcy in order to improve their financial situation in a more efficient and controlled manner.

Should you really file?

Because bankruptcy filing is so common, many people have come to believe that it is the only way to climb out of a financial hole. Well, that is not true and you need to consider many options before you decided on filing for Chapter 13. First let’s see who doesn’t benefit from this kind of filing:

  • Retired seniors who only have pension income and no other stream
  • If most of your debt is related to income taxes

What bankruptcy does?

Bankruptcy can help ease some immediate financial pain, but remember that getting out of your troubles is a long term process and can take many years. Here are some things that will happen when you file for bankruptcy:

  • Your credit score will be affected negatively and will stay low for at least 10 years
  • Some of your possessions may be taken away
  • Debts that have been issued on personal guarantee won’t go away

When you file

Before you file for bankruptcy remember to hire a good, experienced San Jose bankruptcy lawyer. There are many nuances to filing for Chapter 13 and you need somebody to advise you when you are doing so. Filing the right petitions and filling the right forms are all part of this process. A wrong step may negatively affect your situation and you may have to pay out more than required.

America is a capitalist nation and it rewards hard working men. When you are doing bankruptcy filing, it is important that you be completely honest with your attorney and the court. The system will do everything that is possible in order to make life easier for you and help clear off your debts slowly and steadily. If glaring inaccuracies are found in your filings, the repercussions are quite severe and not worth it.

In your filing, make sure that all your creditors are mentioned in the documents. You may want to keep certain creditors such as your relatives or close friends who lent you money. Unfortunately, you are not allowed to choose your creditors, and you can’t keep them out of your filing.

Over the last 6 years, banks and credit unions have done their best to not be negatively affected by your bankruptcy filing. They don’t want to be repaid a lower amount from the debt and newer agreements have provisions for attaching your other accounts and property to your debt and your unsecured debt may suddenly turn into a secured one because of agreement between two creditors.

Remember that bankruptcy is the last resort to sorting out your financial issues. Try to pay of your debt through traditional means as much as possible. It is easier to give away your property or vehicle in the short term, but it can have adverse long term consequences.


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