Cost Of Declaring Bankruptcy

Although there are a lot of people under the impression that declaring personal bankruptcy is a sure shot way of clearing all the debt but in reality all debts do not get cleared by claiming bankruptcy. Payment related to child support, alimony, any taxes that you bear, personal injury debts, education loans funded by government and any housing fee has to be paid even if you declare yourself bankrupt.

By declaring personal bankruptcy you are also liable to pay a fee that is associated with bankruptcy. These include fees that you have to pay in the court and also the fee that you require to pay to the lawyer. A bankruptcy attorney may cost you several thousand dollars.

When declaring bankruptcy please make sure that that you are taking the right decision. Take note of debts that will not get covered, even if you are declared bankrupt. Declaring bankruptcy comes with a number of costs. It is always better to plan alternatives like negotiating with creditors, building a repayment plan, making a budget etc. Even if you have two file personal bankruptcies, you can do that under Chapter 13 so that your liquid assets such as bonds, shares and property do not get confiscated.

Declaring personal bankruptcy has a lot of negative consequences. You will not be able to apply for loan or credit anywhere again. It gets difficult to get a job and you cannot even apply for a home loan. It is difficult to get out of the credit report for 10 years which can limit your credit amount serially.

In case you do not find any other alternative than declaring bankruptcy then it is always recommended that you hire a good bankruptcy lawyer and research as much as information you can before taking your decision. Ask your lawyer to charge you a reasonable amount and ask him if you can pay him in parts. You must only higher that lawyer who will pay personal attention on your case. Bankruptcy lawyer’s fee is something that you cannot escape if you are going to declare bankruptcy. Paying a nominal fee can be both in your and the lawyer's interest.

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Pros and Cons of Declaring Personal Bankruptcy

Declaring personal bankruptcy is a very sensitive issue. In fact, it is one decision that is going to decide your future. Sometimes life under heavy debt may feel like a failure. Fortunately, bankruptcy laws have been designed to provide respite to debtors and allow them to start afresh in their life. They are both positive and negative effects of declaring personal bankruptcy. The decision whether you should file Personal Bankruptcy or not should be made only after going through both pros and cons of the matter.

Types

Bankruptcy is generally filed under Chapter 7 and Chapter 13. Though Chapter 7 can discharge a considerable amount of debt but in most cases it will force a liquidation of the entire assets of individuals declaring the bankruptcy. If the declaration is filed under Chapter 13, the debtor is given some time and a considerable portion of the debt is lowered making it easy for him/her to get rid of his debts.

Benefits

Once the declaration has been accepted by the court, and automatic stays implies which is the first benefit of declaring personal bankruptcy. In any case, creditors cannot make any annoying calls on visit you personally to cause trouble. In case of Chapter 13, terms of loans and other mortgages can be modified and interest rates can also be lowered. Most of the time, a person who has filed personal bankruptcy under Chapter 13 is entitled to get big exemptions.

Effects

It is an undeniable fact that bankruptcy also has a lot of negative effects. Firing bankruptcy under Chapter 7 mainly destroy an individual’s credit that he has accumulated in several years. It is difficult for the one who has declared bankruptcy to get any future loans and credits. Home mortgage also becomes difficult for future. A bankruptcy cannot discharge priority debt like alimony, taxes, student loans and child support.

It is possible for secured creditors to repossess any property or political security that you have. It is recommended that you before you file bankruptcy; you can attempt to negotiate with creditors. Anyhow if things are not working out, declaring personal bankruptcy can be considered.

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Declaring Personal Bankruptcy

Choosing to declare bankruptcy is entirely a personal decision and it may induce different consequences on your professional and financial life. People who are under great burden of debt generally have two choices when filing bankruptcy. They can declare Bankruptcy either under Chapter 7 or Chapter 13. Declaration of bankruptcy under Chapter 7 allows you to seek forgiveness of most debts, file the same declaration under Chapter 13 will lower the debt amount and each structure them into a repayment plan which will be court-supervised. It is important that you have the knowledge of right regulations to successfully declare bankruptcy.

You can prepare yourself a bit before declaring bankruptcy. It is a good idea to make a list of your debts, child support, pending student loans, daycare costs, alimony and utility bills. There is a required set amount of information that you will need to declare while filing bankruptcy whether you do it own or you hire an attorney.

You must also prepare a list of assets that also includes interests from any property or your house. You will also have to include savings account, stocks, any expensive jewelry or any other personal property. You also have to report your retirement account but anyhow you are not going to loose it. Never ever try to hide anything as this is a serious crime. You must adhere to truth when you're declaring bankruptcy otherwise you may even have to face a federal imprisonment.

Take out any bank statements, paycheck stubs and tax return papers that you have and take out a copy of it. If you do not possess any financial documents; you can ask your employer to provide you with Internal Revenue Service.

An important step is deciding whether you wish to declare bankruptcy under Chapter 7 or under Chapter 13. The Chapter 7 may allow complete forgiveness of your debt with exceptions, in case of criminal fines, student loans and child support. Declaring bankruptcy under Chapter 13 will cause the debt to be reduced but you will require paying according to a repayment plan after a small interval of time. It is always a good idea to consult a bankruptcy lawyer before declaring bankruptcy. He will guide you with the right procedure and also recommend you under which Chapter you must file bankruptcy.

Brian Joneta also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Bankruptcy Lawyer

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Choosing A Bankruptcy Lawyer

Too much debt can bring a devastating result in a company's or an individual's life. Providentially, bankruptcy laws exist to bring respite to the person who is overburdened with debt. There are different chapters of bankruptcy laws for different circumstances. The laws also keep changing and if you are planning to seek bankruptcy then you must have knowledge about all that is required. Alternatively, you can hire an experienced and smart attorney who can deal with your case of bankruptcy without any problems. But the question is how you would know that which bankruptcy attorney would be right for you.

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You must first look forward to get a recommended bankruptcy lawyer. You may ask a friend or acquaintance to refer one to you. If you do not get it by referral, try Yellow Pages where you'll find lawyers that are grouped according to specialty. You can also go for debt relief agency. You may first call the bankruptcy lawyer and talk to him about the problem. A lot of bankruptcy lawyers offer free initial consultation. After speaking with two or three bankruptcy lawyers, fix a meeting with one with whom you identify your self. Think about how much experience the lawyer has and whether he specializes in bankruptcy laws or not. Also ask him whether he will be handling the case himself or will hand it over to a paralegal or associate. You can also ask the lawyer if you could play him in installments.

After choosing a suitable lawyer, fix an appointment and meet him and discuss your case in detail. Make sure that you do not hide anything from the lawyer. Ask them to pay individual attention to your matter. Ask about how much fees he/she would be charging along with all the paperwork. If you think that the bankruptcy lawyer is asking for a very low fee, and then please think about your choice again as he/she may not be aware of all the laws.

Bankruptcy should be a matter of very high importance and serious consideration for you. Even though a lawyer is not important for filing bankruptcy petition but the kind of paperwork involved can be complex. So it is recommended that do not try it yourself. After all, bankruptcy may have far-reaching ramifications. A bankruptcy attorney is inevitable to get you through it.

Brian Joneta also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Bankruptcy Law

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Bankruptcy Automatic Stay

Automatic stay is a potent consumer device that offers protection while consumers are seeking bankruptcy. A bankruptcy automatic stay by definition is a temporary evaluation that gets placed automatically once an individual or company files bankruptcy petition.

As listed in the US bankruptcy code section 362, the automatic stay will provide security to those seeking bankruptcy from almost all creditors. Creditors are also barred from taking any action against the individual seeking bankruptcy from the moment the bankruptcy case is filed. The automatic stay feature applies on every bankruptcy case and it provides unique benefit to the filers.

Limitations of the Automatic Stay

Automatic stays obviously have some boundaries. Certain legal actions like criminal cases, tax audits and family court proceedings do not accommodate under purview of the stay.

Who Can Lift the Automatic Stay?

The main aim behind the bankruptcy code is providing security to creditors who have various interests in income and property of the debtor. This does not mean that just anyone who has some property interest in the debtor's estate can claim relief from automatic stay. The relief can only be sought by secured creditors, those who have tort claims or those who are actually the co-owners of the estate.

Procedure for Lifting the Stay

Once the automatic stay has been imposed, it can be modified or lifted only by the court. Creditors can make this possible by filing a motion. If there are a number of creditors, even a single creditor can wish to seek relief. Relief can also be of several forms including modification, termination and conditioning. In the case of termination, the stay gets eliminated. Modification of stay allows creditors to go ahead with certain actions that have been forbidden from the stay. Conditioning allows some requirements that the trustee or editor must satisfy in order to continue with stay.

Significance

This procedure that facilitates relief from automatic stay is in favor of creditors and it un-does the unjustified claims from the debtor. The laws are meant to do justice to both the debit and creditors. For correct procedure, it is important that one should consult a good bankruptcy attorney.

Brian Joneta also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Cost of Declaring Bankruptcy

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