You Cannot Get Another Bankruptcy Discharge For A While
In most cases, if you complete a Chapter 7 bankruptcy, you cannot get another Chapter 7 bankruptcy discharge for eight years and you can’t get a Chapter 13 discharge for four years. If you complete a Chapter 13 bankruptcy, you cannot get a Chapter 7 discharge for six years and a Chapter 13 discharge for two years.
This can cause problems if you anticipate financial problems in the future. For example, say you lose your job, file for bankruptcy right away, and receive a Chapter 7 discharge. If you can’t find a job for some time and your bills begin to mount again, you are barred from filing for bankruptcy again until you meet the above time frames.
Are There Property Limits For Debtors Filing Under Bankruptcy Chapter 7 Vs Chapter 13
While there are no property limits for debtors filing under either form of bankruptcy, chapter 7 vs chapter 13, the reality is that your case depends on property you may exempt. As discussed previously, in a chapter 7 bankruptcy, you can keep exempt personal property in bankruptcy. Property that you cannot protect with bankruptcy exemptions may be taken and liquidated by the bankruptcy trustee for the benefit of unsecured creditors.
Similarly, under chapter 13, there are no property limits. The same rules concerning bankruptcy exemptions exist. If you have nonexempt property, you can expect to pay the dollar value of that nonexempt property in your chapter 13 repayment plan.
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What Are The Disadvantages Of Filing For Bankruptcy
Although bankruptcy has many advantages as stated in the section above, it also has repercussions; that can negatively affect your lifestyle and your long term financial situation. Because of the list of disadvantages, you should think hard about whether filing for bankruptcy and whether it is the right thing for you to do. Issues like employers knowing of your bankruptcy can be a downside of filing for bankruptcy. Listed below are some of the most important and common disadvantages:
While the last point might seem small, compared to the other disadvantages, bankruptcy often carries a stigma, which can affect your professional and personal life. However, the benefits of bankruptcy often outweigh the disadvantages.;
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Not All Types Of Debt Are Eligible For Bankruptcy
A big misconception with bankruptcy is that if you declare it, youre no longer responsible for paying any current debt. While filing for bankruptcy may help wipe out unsecured debt like medical bills, personal loans, or , not all debt is eligible to include in bankruptcy filings.;
For example, student loans and secured debt like mortgages are usually still your responsibility after you file. Alimony can also not be discharged by bankruptcy. So even if you declare bankruptcy, you still may have to face outstanding debt. Depending on the debt you struggle most with, bankruptcy may not be worth it.
Youll Be Paying Higher Interest Rates For A While
If you have bad credit, chances are you were already paying a higher interest rate on your debts. After receiving the bankruptcy discharge, you will be able to get new credit cards or personal loans, but you will also be charged a higher interest rate than normal. However, as you continue to rebuild your credit and make timely monthly payments, you will qualify for lower interest rates, saving you money. Thatâs why itâs important to rebuild your credit to improve your credit score.
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Con: Filing For Chapter 7 Bankruptcy Is Public Record
Once your case is resolved, the fact that you filed for bankruptcy will be accessible by anyone who wants to know. This could include future employers, investors, partners, and businesspeople. While there is no shame in filing for bankruptcy, doing so could harm your future business prospects and impede your ability to secure loans.
Filing Bankruptcy Will Not Protect Other Debtors
If you choose to file under Chapter 7, the only obligation to clear the debt that will be discharged is yours alone. Other people in your household who owe debts must deal with them on their own.
The difference comes when you file Chapter 13, which can also protect the co-signer. However, this works because the expectation is that youll clear your debt through a repayment plan.
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What Is The Process Of Filing For Bankruptcy
Filing for bankruptcy is a very personal decision. Most people file when they have made a good-faith effort to repay their debts, but see no way out other than to file for bankruptcy. Such people and businesses may declare bankruptcy by filing a petition with the U.S. Bankruptcy Court, that is, a request that the court provide protection and relief under the Bankruptcy Code. In addition to that request, the debtor must provide information about his or her assets, liabilities, income and expenditures. Often, debtors have a lawyer prepare and file the petition and other information for them, but some debtors represent themselves.
What Are The Advantages Of Filing For Bankruptcy
There are several advantages to filing for bankruptcy.
You may be able to keep many of your assets, although state laws vary widely in defining which assets you may keep.
Collection efforts must stop as soon as you file for bankruptcy under Chapter 7 or Chapter 13. As soon as your petition is filed, there is by law an automatic stay, which prohibits most collection activity. If a creditor continues to try to collect the debt, the creditor may be cited for contempt of court or ordered to pay damages. The stay applies even to the loan that you may have obtained to buy your car. If you continue to make payments, it is unlikely that your creditor will do anything. However, if you miss payments your creditor will probably petition to have the stay lifted in order either to repossess the car or to renegotiate the loan.
You cannot be fired from your job solely because you filed for bankruptcy.
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The Pros And Cons Of Filing For Bankruptcy
- The Pros and Cons of Filing for Bankruptcy
If youre facing mounting debts, are struggling to pay bills, or are fed up with creditors hounding you for cash, then filing bankruptcy could be the way out youre looking for.
Filing bankruptcy can give you the opportunity for a fresh financial start, but its not as simple or as easy as just wiping the slate clean. Filing bankruptcy is a serious legal process to undertake and, given the potential for long-lasting repercussions for you, your business and your family, its not a process that should be ever entered into lightly.
If youre facing financial difficulties, the experts at Irwin Insolvency are here to explain the pros and cons of filing for bankruptcy.
What Are The Pros And Cons Of Filing Bankruptcy
Posted on 6 July 2021
Bankruptcy is a form of debt relief that should be considered carefully generally speaking, it is a last resort for those struggling with overwhelming debts. When it comes to finding a form of debt relief, your first step should be to speak to an experienced Licensed Insolvency Trustee. They will work with you to discuss your options and any alternatives to bankruptcy that may be more appropriate. For anyone struggling with more debt than they can afford to repay, filing bankruptcy could be an excellent way to clear any unmanageable debts. If you are wondering what are the pros and cons of filing bankruptcy?, we have listed a summary for you below.
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Debt Management Program Options Other Than Bankruptcy
Before you file for bankruptcy, make sure you check out all of your options. A;debt management program, like the one at Advantage CCS, could help you get out of debt without having to file for bankruptcy. Call us today and one of our certified credit counselors will work with you on a budget and give you some different options. You may find out that you can get your finances back on track without having to declare bankruptcy.
Lauralynn Mangis
Immediate Relief In The Form Of A Much Needed Breathing Spell
The moment your case is filed with the bankruptcy court, youâre protected from creditors. Filing bankruptcy triggers an automatic stay – or stop – on all collection actions. This means all phone calls, garnishments, and collection letters have to stop. It even put at least a temporary stop to repossessions, evictions, and foreclosures.
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Disadvantages Of Declaring Bankruptcy
Bankruptcy should be the option of last resort. Not everyone should declare bankruptcy and there is a downside.
Making The Final Decision To File
Carefully consider the pros and cons of filing a Chapter 7 Bankruptcy. Having an attorney like W. Ron Adams to help you through the process can be very beneficial. When it comes to the meeting of creditors and the plethora of paperwork, you are in good hands and can rest assured that you have experienced and dedicated representation.
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Our Resources That Are Financial Checklists And Tools Are Manufactured With You At Heart
As individual finance geeks, we think customers will be able to make smart cash choices and never having to be fully knowledgeable in finance. This is exactly why we not merely partner with a few for the best-in-the-industry specialists, but additionally advertisers providing many different economic solutions which will gain you. Our lovers may influence just exactly exactly how and where services and products show up on this website, but we confirm their services are aligned with this goal that is main you with a multitude of completely investigated resources and user-friendly tools to simply help make suggestions in your economic choices. Bankruptcy is the best process that is legal enables individuals or companies in monetary difficulty to erase or repay most debts and begin over. It will also help avoid creditors from harassing you, garnishing your wages or foreclosing in your house. But there might be lots of pity and anxiety connected with filing for bankruptcy, and you will worry so it will destroy your credit forever.
Discover The Benefits Of Filing For Bankruptcy
When you are seeking bankruptcy protection, our firm represents individuals and small business owners who want to file Chapters 7 and13 bankruptcy cases. We can help you navigate through the more complex filings of debt reorganization through Chapter 11 bankruptcy and with Chapter 12 bankruptcy for family farmers.
You might also be able to retain your assets even if you file for bankruptcy. If you are ready to file for bankruptcy protection and to start eliminating crippling debt, contact the team members at Farmer & Morris Law, PLLC by calling today.
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How Much Does Bankruptcy Cost
Another consideration is the cost of filing for bankruptcy. Filing typically costs a couple of hundred dollars, but hiring an attorney to represent you and protect your interests could cost a great deal more. Although individuals can act on their own behalf without an attorney, by going it alone you run the risk of losing certain rights or property. Generally speaking, because of their knowledge of bankruptcy law and experience with the courts, an attorney can be worth the money.
After bankruptcy, you will probably find it difficult to get a credit card, except at a very high interest rate. One alternative is a secured card, where you put some money on deposit with the issuer.
Specific Advantages Of Chapter 13 Bankruptcy
Even though most people prefer Chapter 7, Chapter 13 bankruptcy has unique benefits. For instance, you can:
- pay off nondischargeable debt, such as support obligations and past due taxes, over three to five years
- reduce or cram down the amount you owe on an asset to the value of the property , or
- eliminate a junior mortgage when your house is underwater.
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Understand The Benefits Of Bankruptcy Filing
You may be wondering what the drawbacks of declaring bankruptcy are. However, there are certain benefits to filing for bankruptcy as well. Filing for bankruptcy may be the solution you need when you need a new start to come out from under a mountain of debt.;
In addition to a fresh start, federal bankruptcy provides a number of advantages to consumers, business owners, and corporations, including the following:
- Complete discharge of all dischargeable obligations, with no need to repay them in the future.
- The opportunity to keep certain personal belongings and assets, such as your house and car.
- Relief from debt collectors continuous pressure and intrusive contact.
- When dismissed debts are deleted from your credit history, your credit score may increase over time.
During the bankruptcy procedure, your earnings cannot be garnished by creditors, and your vehicle cannot be repossessed. Other benefits of bankruptcy that relate to your circumstances may be explained by your lawyer. Bankruptcy may help you start over financially, whether its for yourself, your family, or your company.
Not All Debts Are Covered
Bankruptcy covers almost all unsecured debts, but not secured debts which are those associated with an asset, like a car loan or a mortgage. Bankruptcy therefore cannot discharge debts including alimony, child support, and student loans if you have left education within seven years. Find out more about the debts covered by bankruptcy.
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What About The Pros And Cons Of Filing Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 bankruptcy are both powerful debt relief options for folks in need of a fresh start. But the pros and cons of filing Chapter 13 bankruptcy are quite different than for Chapter 7. If you have a high disposable income or non-exempt assets you want to protect, Chapter 13 may be right for you. Check out this article to find out more about the pros and cons of filing Chapter 13 bankruptcy.
Pros &cons Of Filing Chapter 7 Bankruptcy
Filing bankruptcy is a big step that has its benefits and drawbacks; hence, it is a decision that needs in-depth contemplation. Nevertheless, Chapter 7 bankruptcy is a powerful tool for debt relief in the U.S. Many corporations and individuals utilize it to resolve their financial crisis and obtain a fresh start; bankruptcy filings have increased by 30% compared to last year. If you are struggling with money problems and want out, contact an experienced bankruptcy lawyer. If you have your doubts or concerns about filing Chapter 7, review the pros and cons to attain some clarity.
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Will I Lose My Home
Generally, not under Chapter 13. Under Chapter 7, it depends on how much equity you have in house. If you have a lot of equity in it, the trustee could choose to have it sold to pay off creditors.
When you file a bankruptcy petition, you have the opportunity to exempt certain property. The type and amount of exemption available varies from state to state. This means you can normally protect a certain percentage of the equity in your house and other property. The federal maximum is usually $25,150 double that if you are married, your house is jointly owned with your spouse, and you file the bankruptcy jointly with your spouse. Though you may have the option to file bankruptcy without your spouse.
If you have less than that amount in equity, the court-appointed trustee probably wont sell your house since it wont produce enough to pay off much debt. Though, your lender can still foreclose on the house if you miss your mortgage payments.
If you have more equity than you can exempt, the trustee likely will sell your house and youll receive the exemption amount on sale. For instance, if your house is sold for $200,000, and you were able to exempt for $25,150, youd get $25,150 on sale and the rest will go to pay off your mortgage and other debts.
Other personal property that can be sold includes jewelry, antiques, appliances, furniture, books, musical instruments, almost anything of value. There are also exemptions for those items in most states.
Filing Bankruptcy: The Pros
The most obvious advantage of filing for bankruptcy is that it can discharge many of your debts. Discharge means the debts are forgiven and you are no longer responsible for them.
If you have been unable to pay your bills, you may be able to have these debts legally waived. Otherwise, you can file for Chapter 13, which allows you to reorganize your debts and consolidate them into a single monthly payment. This can make repayment much more affordable and manageable.
In addition, once you file for bankruptcy, the court will issue an automatic stay. An automatic stay means that creditors, the people and entities to whom you owe money, will be barred from making collection attempts on your debts. This will immediately put a stop to stressful phone calls or letters you may have been receiving from collection agencies.
Also, contrary to popular belief, you do not lose all your property when filing for bankruptcy. Under both federal and state laws, there exist what are known as bankruptcy exemptions. Bankruptcy exemptions are assets that bankruptcy trustees may not seize during Chapter 7 bankruptcy filings. This means that if you file for Chapter 7, you may be able to keep such items as your house, clothing, jewelry, and a variety of other personal belongings.
Finally, if you are worried that you may be fired from your job for filing bankruptcy, don’t be. Under bankruptcy laws, you cannot be discriminated against by your employer for filing for bankruptcy.
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