When to File
How To Know When Bankruptcy
Is The Best Option
There is nothing enjoyable about going through a bankruptcy; even the word itself is horrible, and yet the media takes great delight in highlighting rich and famous sports stars and celebrities who have had to go through the process. Mike Tyson, Kim Basinger, and Marvin Gaye are good examples of people who had the world at their feet and then for whatever reason had to file for bankruptcy. The reality is that there are very few people on this earth who are exempt from the possibilities of bankruptcy, and it is essential to understand that there is no shame in having to file.
It could be argued that the American economy is built upon debt; we all receive credit card offers via the mail on a daily basis, people no longer save up and buy material items, it has become the norm to finance virtually everything on credit. But for some people, there comes a time when the pressure gets too much when sleepless nights and panic attacks happen weekly, and it is time to make the decision to file for bankruptcy.
When you are living in the middle of the nightmare, it can be easy to talk yourself into filing for bankruptcy, and then out of it again, sometimes within the space of a couple of minutes. To try and counteract this we have compiled a list of questions you can ask yourself to solidify your current financial situation in your own mind. When it comes to dealing with bankruptcy, it is critical to deal with facts rather than emotion, so the answer to most of these questions is either yes or no. Answer them honestly, and do not attempt to come up with excuses or justifications.
- Do you only ever make minimum payments on your credit cards?
- Do you and your partner honestly know the total amount of debt you are in?
- Do you avoid dealing with your finances due to fear?
- Do you have to use your credit cards at the end of every month just to buy essentials?
- Have you researched debt consolidation?
- Have bill collectors already started to call you?
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Ignoring The Problem Is The Worst Thing You Can Do
Go through your answers above; if you answered yes to two or more of the questions, then at a minimum, you need to evaluate your financial situation properly. The reality is that if you have answered yes to any of the questions, you have an idea that you may be in over your head. Many people think that bankruptcy is when you owe many thousands of dollars, but the amount of debt is only one factor. In layman’s terms, bankruptcy is when you owe more money than you can afford to pay.
Get A Piece Of Paper and a Pen
There is nothing to be gained from guessing in this situation. Now is the time to get a clear understanding of the gravity of the situation, and the only way to accomplish this is to write down a full and comprehensive list of all your liquid assets. You might be surprised how many of those you have, they include things like retirement funds, stocks, properties, motor vehicles, and other non-bank account funds. You do not need to be 100 percent accurate for every item, but try and be honest and realistic with yourself.
Having added up all of your assets, it is now time to do the same with your debts. Remember to include loans, credit cards, and any outstanding bills. Now compare the two totals, and you will easily be able to see whether your assets are larger or smaller than your debts. If your debts are larger, then filing for bankruptcy may be an option, but do not think that this is an easy solution to your situation. It can and does have many implications, so do not be tempted into making rash decisions.
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How Do I Declare Bankruptcy?
There are two ways in which you can become bankrupt. The first one is probably the more favorable choice, as it allows you to remain in control of the process to a certain degree. This is because you voluntarily file for bankruptcy. The alternative option is when your creditors go to court and ask the court to declare a person bankrupt.
Once you have decided to file for bankruptcy, there are other decisions to make, including the type of bankruptcy you want to file for, as there are benefits and drawbacks to each choice. Everyone at Bankruptcy Help can answer any questions you may have, and will happily guide you through the process.
There are three main types of bankruptcy, and each one is explained in depth in other sections of this website. They are
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Do Not Be Scared Of Bankruptcy - Sometimes It Is The Best Solution For You and Your Family
Nobody likes to admit that they have failed, and not many people want to ask for help. There is a huge stigma around failing with money, which can prevent people from seeking help or advice. The government understands this, which is one of the reasons why bankruptcy laws were created. The laws are there for your protection as well as your creditors. The best time to deal with your financial situation is here, and now, the problems will not go away, the phone will not stop ringing, and every day will just magnify the problem.
The quicker you grasp the nettle and deal with the problem, the easier it will be to solve; trying to avoid bankruptcy could be a poor decision and cause even more problems further down the line. It will cost you very little to find out your options; it could cost you a lot more to keep on avoiding the problem. Filing for bankruptcy could give you a fresh start, providing you with the lifeline you need to steer your ship back to shore.
Information is power, so do not waste any more time. Contact our team today and get all of your questions answered quickly so that you can make the right decision for you and your family.
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Frequently Asked Questions
There usually are court costs associated with filing for bankruptcy. The costs will vary depending on the type of bankruptcy, and your current financial situation. At the time of writing, the cost of filing for a Chapter 7 Bankruptcy is $306 and for a Chapter 13 Bankruptcy $281, . Yet, some courts may also charge a more administration fee. The good news is that in most cases, it is possible to pay the filing fee in installments. Some courts may also waive the filing fee for a Chapter 7 Bankruptcy if you can prove that your income is below a certain level. And the federal courts decide not to allow you to pay the filing fee in installments.
Whether you use a company like Bankruptcy Help or an attorney, there will be additional costs or monthly payments involved including attorney fees, and it is standard practice to pay upfront for those services, particularly in a Chapter 7 Bankruptcy case.
Chapter 7 - Perhaps the most well known and severe type of bankruptcy. Typically, this takes between two and three months and involves the sale of your residential property to pay off your debts.
Chapter 11 - A highly complicated process, predominantly targeted towards business debtors, but for instance, it may be suitable for individuals with substantial debts and assets.
Chapter 12 - A type of bankruptcy very similar to Chapter 13, but exclusively available to family farmers and fishermen.
Chapter 13 - A court-supervised repayment plan which is designed to repay an agreed percentage of your total debt, over a period between 3 and 5 years. All cases in Chapter 13 refer to a form of payment plan. You will first have to evaluate the amount of loans you would repay as well as the money you wish to retain in order to decide the payment plans.
Chapter 7 and Chapter 13 plans are the most frequently used options; it is preferable to file a Chapter 13 in any case, as it enables the person filing for bankruptcy When to File to retain their property, versus Chapter 7 where they must sell it to clear their debts.
The fact that you have filed for bankruptcy will be registered on your credit report. Once you filed for Chapter 7, then it will remain on the file for ten years, and for seven years if you filed for section 13. But, although obtaining credit will be more challenging, it will not prevent you from ever obtaining credit again in the future. So, before filing for bankruptcy, it is important that you seek help and legal advice.
There are hundreds or thousands of reasons why an honest worker might be in financial difficulty. The federal bankruptcy laws were designed to provide people with a second chance, and a fresh start. You can use the When to File bankruptcy exemptions or the exempt property law to protect things that you will need to work and live. So, When to File laws were also intended to ensure that all creditors are treated. Once you've finished the bankruptcy process, your creditors won't collect outstanding debts. And as a consequence, you are then able to move forward with your life.
Dischargeable debts are debts that can be eliminated after an individual file for bankruptcy. When a debt is said to be discharged, the debtor is no longer obligated to repay the debt, and the creditor is prohibited from trying to enforce payment. Need to understand that if someone else co-signed on an agreement, they would remain liable for the debt. Also, if the debt was a secured loan, where you agreed to use the property as collateral for the loan. Then your creditor may still be entitled to repossess the property, should you not repay the loan. If this is the case, it is best to talk to our helpful customer service team who will give you the right advice or information from a bankruptcy lawyer.
