Are you counting on a bankruptcy to knock off your credit card, cash advance, student loans, and medical debt? Once upon a time, declaring bankruptcy was a fairly easy process, but it is no longer true.
As tough as a decision to file for bankruptcy is, the process is now longer and more complicated than it was just a few years ago. This financial solution is an option in which a person is not advised to do alone; retaining a lawyer would be the best route to take.
*The price for filing fees has gone up.
*People choosing to file for bankruptcy must take credit counseling classes from an approved program. The classes must be completed before filing.
*Chapter 7 is much more difficult to qualify for. There is a Means Test which is used to help determine if a person’s income is low enough to qualify.
*Once bankruptcy has been declared, there are follow-up classes which must be taken.
There are different bankruptcy sites located on the web to help inform a person about the process. There are specific websites for each state. Find articles written about what a person can expect as well as what will be expected from the person who is declaring. Use the provided worksheet to gather all the financial and personal information which will be needed to file. Take the Means Test to find out whether or not you qualify for Chapter 7 Bankruptcy or if you will need to file Chapter 13 instead.
It is important to understand what finances qualify in the bankruptcy program. The following listed debt will not be covered under Chapter 7 and will need to be paid in full after Chapter 13.
*Bankruptcy can help with secured debt, but it cannot prevent the lender from seizing the property. If you include your home in the bankruptcy, the loan will be forgiven, but you will also lose your home.
*Child support and alimony is not forgiven during this process.
*Student loans will not be forgiven except in rare extreme circumstances.
*Tax debt is very difficult to include in bankruptcy. There are many strict qualifications which must be met in order to get old tax debt forgiven.
*Debt which was created from a death or injury due to driving while intoxicated.
*Fines or penalties for violating the law will not be accepted into a bankruptcy filing.
*If you forget to list any debt, bankruptcy will not eradicate it.
If your home is in danger of being foreclosed, Chapter 13 Bankruptcy will help to stop the process and force the lender to accept a payment plan you can afford. In order to make this plan work, the individual will have to prove that there will be enough income to follow through with the new plan.
There are many financial consequences for filing for bankruptcy. It is a last resort option for those with major financial troubles. Credit card and medical debt are the leading types of debt which bring individuals to this point. Cash advance and payday loan debt will qualify, but a title loan is secure and you will lose the car after all. Talk with the credit counselors to see if there is another solution to your debt problem. Bankruptcy is always a last resort option.