If you are thinking of filing for bankruptcy to get debt relief don't do it until after you have read this.
Are you being harassed by your creditors because you cannot pay your debts and so you are thinking of filing bankruptcy to get the debt relief you need? Don't make any move yet until after you have read the following facts about it.
Hard facts about Bankruptcy
1. Under Chapters 7
Under chapter 7, all collection actions for your outstanding debts during the hearing of your case, are temporarily suspended. If adjudged bankrupt, the court discharges your debts, i.e., your debts are forgiven; your creditors also have no claim on your future income.
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However, all non-exempt properties are sold by a court-appointed trustee, who distributes the proceeds of the sale to your creditors. Debts like alimony, child support, student loans, taxes and those incurred through fraud or theft are not discharged.
Cost of filing under this chapter: $600 to $3,500 in attorney's fee; filing fee is $299; and any amendment to the case is $26.
2. Under Chapter 13
If you file under chapter 13, you must have unsecured debts below$100,000, or secured debts like home mortgages and car loans below $350,000. You have to present a repayment plan which is reviewed by the court-appointed trustee, your creditor, and the court. If approved, you remit payments to the trustee, who then pays your creditors. Note however that the amount of your debt remains the same; tax obligations are not discharged, and its interest and penalties still have to be paid.
You will then be under court supervision for the duration of the plan (up to five years) and can never make new debts or sell any of your assets without the court's permission.
Filing under this chapter will cost you: $1,500 to $3,500 in attorney's fee; filing fee is $274 plus 10% of the total amount of debt administered in trustee's fee; any amendment costs $26. Conversion from chapter 13 to chapter 7 is $15.
Under both chapters, your bankruptcy appears on your credit record for ten years; and although it is possible for you to get credit or financing, it will be at higher interest rates.
Debt Relief - A Viable alternative
Under the new law, consumer credit counseling is mandatory. Better yet, why not try debt settlement or debt negotiation by a professional and honest company and have the chance to reduce your debts by as much as 50% to 89% and avoid its adverse consequences? There are debt relief companies out there who you can consult for free and really can help you find the relief you need.
Summary
Under chapter 7 your debts are discharged, but not alimony, child support, student loans, taxes and those incurred through fraud or theft. All non-exempt properties are sold and distributed to your debtors. Cost to you: filing fee is $299; any amendment is $26 and attorney's fee is $600 to $3,500.
Under chapter 13, covering unsecured debts below $100,000, and secured debts like home mortgages and car loans less than $350,000 must have to be paid under a court approved repayment plan. Cost to you: $1,500 to $3,500 in attorney's fee; filing fee is $274 plus 10% of the total amount of debt administered in trustee's fee; any amendment is $26; and conversion to chapter 7 is $15.
Plus your bankruptcy appears on your credit record for ten years; and you can only get credit or financing at higher interest rates.
So why not explore other debt relief options before filing for bankruptcy?
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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