To initiate the bankruptcy process, you must file a petition in federal bankruptcy court. You must file a statement of assets and liabilities as well as schedules listing of your creditors. Once you have finished filing bankruptcy, your creditors can no longer pursue legal recourse against you to collect debts which have been discharged under the bankruptcy code.
Negative Aspects of Bankruptcy
If you miss a regularly scheduled payment at anytime during your repayment plan, you could end up in violation of the court and be forced to repay all the debt! Your debts will be reinstated and you will owe the full amount plus any accrued interest, late fees, and finance charges. This could put your financial condition into a tailspin.
The most difficult part of bankruptcy is learning to live with the fact that filing bankruptcy limits your personal spending to items that the court considers a “necessity of life”. Most debtors do not even complete their chapter 13 repayment plans. Most debtors who file think they will be able to complete their repayment plan; however, only about a third of debtors actually do. Additionally, chapter 7 bankruptcies may stay on your credit longer and have longer negative effects on your credit scores than a chapter 13 does. This time frame traditionally ranges from 7-10 years for most consumers.
Many people do not realize that if you own a home with a sizable amount of equity, have a fair amount of assets to protect, or have co-signers on a loan, you most likely will not be able to file chapter 7 bankruptcy under the current bankruptcy code. Now that the new bankruptcy reform has passed, it will be even more difficult to file for both chapters 7 and 13 bankruptcies.
Many people think that filing bankruptcy is the silver bullet that will fix all of their debt snowball and credit related problems; however, filing bankruptcy is the worst thing you can do to your credit history. Most lending institutions and creditors consider your bankruptcy when assessing your credit history for a personal loan even after the bankruptcy has expired. Qualifying for a loan after filing for bankruptcy can be very difficult and could cost you considerably more in interest and finance charges than a consumer who has not filed. It is understood that some financial situations are dire enough to require you to file for bankruptcy. However, you should avoid bankruptcy if at all possible. Christian Debt Relief and its network of debt settlement firms can help eliminate most, if not all, of your unsecured debt as an alternative to filing to bankruptcy.
If you require additional information on the process of filing for bankruptcy; you may want to contact a bankruptcy attorney in your area.
Bankruptcy is Avoidable.
Hundreds of thousands of people unnecessarily file bankruptcy each year. Christian Debt Relief and our network of affiliate companies have worked closely together to develop a debt settlement program which can eliminate your current debt in the shortest time possible, based upon your financial capabilities, and without having to file for bankruptcy. While bankruptcy may seem like the best solution to your problems, in many cases, it's not.
Decided to look for an alternative and to avoid bankruptcy? Check out your available debt relief options as well as our debt settlement programs.
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