Bankruptcy Law

Bankruptcy Once and for All

Written by jessica Alba

No one will dispute the fact that the economy is in lousy shape.  Unemployment is the highest it has been in 25 years.  The days when a person works for the same company throughout an entire career are long gone.  Most people are worried whether they will have a job tomorrow or be presented with a pink slip.  Add to that the prevalence of credit card debt in society, and it is no wonder that you might have to claim bankruptcy once and for all. Why Bankruptcy? Filing for bankruptcy is meant to be the step of last resort.  It is the one way an individual can get a fresh start.  A lot of people have always paid their bills on time. But, an illness or injury can turn your financial world upside down.  For example, if you are diagnosed with something like cancer, your finances will be devastated in a matter of weeks or months.On the other hand, maybe you have just spent beyond your means.  Credit card offers in the mail seemed like free money.  Unfortunately, when the bills started to arrive and the interest rates went up, you could not afford the bills and still keep a roof overhead and food on the table. But, regardless of the reason for your financial woes, you are entitled to a fresh start.  You deserve a chance to improve the quality of your life and have a brighter future for you and your family. Bankruptcy Laws But, just because you believe that you are at the end of your financial options, you will have to comply with the bankruptcy laws, to figure out whether you are really in desperate need of that fresh start. You will need to hire a bankruptcy lawyer. During the process of bankruptcy, your financial life will totally be laid out for those concerned to see.  You will have to make an accounting of all of your bills and financial obligations.  You will also have to provide employment and income information.  It will have to be verified that you truly cannot pay your bills. Then, it will have to be determined what type of bankruptcy you qualify for, and what would be in the best interests for you.  For example, chapter 7 bankruptcy is generally a forgiveness of your debts.  Your financial slate is wiped clean, and you truly have a fresh start.  But, it is also not without cost.  You will have bad credit for up to 10 years, and it could be really difficult to make any purchase on time, until the bankruptcy is expunged from your record.  So, if you need a new car to get to work, you may be taking the bus for a while. Alternatively, you can opt to file chapter 13 bankruptcy.  In essence, you will still owe your creditors.  But, you now have the opportunity to restructure finances, so you can afford to make the payments.  For example, suppose you still owe the credit card company a thousand dollars for your computer.  But, your laptop has depreciated so much, it is now only worth five hundred dollars. According to chapter 13, your assets and liabilities are meticulously scrutinized to determine the current value.  So, if you want to keep that computer, you will still have to make payments, but it will be only for the current value that the company would get out of it, if they took it back for resale as a used item.  Many people choose restructuring bankruptcy because they want to pay their debts, but hard times have simply made it impossible.  So, this is a compromise of sorts.  The creditors still get some payment and the debtor can still get the help needed for a fresh start. Not the End Successfully filing for bankruptcy is not the end of your financial concerns, even if the majority of your debts have been forgiven.  So many people find themselves in bankruptcy court because they simply do not know how to handle money; anyone who files for bankruptcy must attend counseling.  Under the new laws, it is a requirement of this type of legal action.  The judge does not want to see you repeat the same mistakes twice.  Bankruptcy is a second chance, not a revolving door. So, when you file for bankruptcy, once and for all is the whole idea.  You have had hard luck or made poor financial choices and now you have a second chance to improve your quality of life.  But, you cannot make the same mistakes all over again and expect bankruptcy to bail you out in the future.  Yes, you can file for bankruptcy more than once, after eight years.  However, the judge will not look kindly on your dilemma, if you have been through this in the past. So, if you have to file, go ahead.  But, be sure you make good use of that second chance.

 

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