5 Benefits Of Filing For Chapter 7 Bankruptcy

Once the petition is filed, an immediate stay will go into effect. This means that creditors can no longer talk to or call the debtor directly, nor can they claim any property as settlement. A month after this, the trustee will call a meeting with the debtor and creditors - this is called the 341 meeting. Objections, if any, are negotiated and resolved; if there are no resolution and disputes remain, a judge will arbitrate. If there are no objections, the meeting could be over in five to ten minutes.

One big reason people choose Chapter 13 is that it will allow them to get caught up on their mortgage. If you've fallen behind in your payments, you can pay the arrears over the course of three to five years. Of course you have to be able to afford to pay the arrears as well as your regular mortgage payment, so if you've fallen too far behind Chapter 13 may not be possible. Chapter 7 will not let you get caught up on mortgage payments.

If it's not a necessity remove it from your budget. Fourth step if needed would be to apply for government assistance. This allows assistance will bill payments, food purchases and unemployment compensation. Fifth step is to consider credit counseling. This may be helpful in not only helping you to regain financial health but it can bring peace of mind knowing how to run your finances in a healthy manner. If you have followed these five steps and your finances are still out of control, speak to a bankruptcy attorney. Fill out an evaluation to see if bankruptcy may be the right choice in regaining financial control. Bankruptcy is not a process you should be ashamed over. It is a legal process to assist those who are suffering with debt to begin a new financial start. You can regain your financial health as long as you put forth the effort to do so.

Filing for bankruptcy allows you to get out of debt while giving you protection from creditors at the same time. However, in order to keep creditors at bay and become debt-free, you have to make your payments on time. You can't have any late payments and you should never make just a partial payment without letting the court know.

In the buildup to the credit crunch banks lent to virtually anyone who asked them, this led to many poor people, the so-called sub-prime poor, getting mortgages and credit that they could never ever pay off. This is one of the major factors in the banking crisis but it has had a knock-on effect on normal hard-working families.

If a debtor wishes to keep certain non-exempt assets for whatever reason, Chapter 13 may be a better choice to file for. Chapter 13 is similar to Chapter 11 but is designed for individuals rather than businesses. Under Chapter 13, the debtor is allowed to retain ownership over their assets. Chapter 13 also allows for individuals to come up with a reorganization plan in order to pay off debt over a period of three to five years. Another aspect of Chapter 13 is that a certain amount of debt can be eliminated depending on an individual's level of income. An advantage that Chapter 13 bankruptcy has over filing for Chapter 7 is that housing foreclosures may be stopped, though it may be reinstated afterward. Another advantage to Chapter 13 over Chapter 7 is that it can allow for super discharges of debt that are not found in Chapter 7.