Simple Bankruptcy Guidelines to Follow
When BAPCPA, also called the Bankruptcy Abuse Prevention and Consumer Protection Act was passed in 2005, filing for bankruptcy has proven to be a lot more difficult than it already is. Many consumers, who were overwhelmed with debt, choose to not file at all and simply suffer the consequences. However, with a little bit of knowledge about bankruptcy for beginners, one need not be too stressed about filing for bankruptcies.
The following are pointers on bankruptcy for beginners which you can use to make filing easier for you:
1. Choose which type of bankruptcy is more appropriate for your situation.
When filing Chapter 7, you relinquish your non-exempt property. In return, you will be discharged of your debts. But not all debts are qualified for this. Spousal and child support, student debt loans, and some forms of taxes are not included in this privilege.
When filing Chapter 13, you get to keep your assets, provided that a portion of your future income will go to your debt payments within 3-5 years, and not much longer. Know that this is much harder to file because they place a cap on your debt, and you would have to have a stable monthly income to support it.
2. Decide whether to get a lawyer or not.
It is always recommended to seek the help of a counsel. Fees will vary depending on your location and situation. In the event that you cannot afford it, you may choose to do this on your own.
3. Be aware of the time restrictions when filing for bankruptcies.
Chapter 7 can only be filed once in an eight-year period, and Chapter 13 can only be filed once in four years.
4. Know that bankruptcies are reflected on your credit report.
Your credit report will reflect Chapter 7 and 13 bankruptcies for 10 years, but the latter can be removed after 7 years depending on your negotiations.
These are just some helpful tips on bankruptcy which you can follow. The best way to not have to go through these things is to avoid bankruptcy altogether. How? Always pay your bills on time and in full; reduce your debt; have some emergency money saved up as a contingency measure; and seek the advice of a qualified professional to avoid deeper financial troubles.
Tags: bankrupt, Bankruptcy, bils, chapter 13, chapter 7, debt