Filing For Bankruptcy
- Personal bankrutcy
- Filing for bankruptcy to eliminate debt
- The impact that bankruptcy has on credit ratings
- Chapters 7 & 13
Bankruptcy - is it right for you?
Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, making it difficult to acquire credit, buy a home, get life insurance, or sometimes get a job. However, it is a legal procedure that offers a fresh start for people who can't satisfy their debts. Individuals who follow the bankruptcy rules receive a discharge — a court order that says they do not have to repay certain debts.Filing for bankruptcy
Filing for bankruptcy puts into effect something called the "automatic stay." The automatic stay immediately stops your creditors from trying to collect what you owe them. So, at least temporarily, creditors cannot legally grab (garnish) your wages, empty your bank account, go after your car, house or other property, or cut off your utility service or welfare benefits.The key to knowing if you should file bankruptcy includes 2 questions.
- Will bankruptcy discharge enough of your debts to make it worth while?
- Will you have to give up property you desperately want to keep?
What debts are not discharged by bankruptcy?
In general, liens, such as mortgages and security interests in cars, are non-dischargeable as are some other types of obligations including:- Federal, state and local tax claims (subject to specific time rules)
- Customs duties
- Spousal support
- Child support
- Most student loans
- Secured debts
- Fines and penalties imposed by government agencies
- Debts incurred due to false statements made with the intent to deceive
- Fraud committed in a fiduciary capacity, such as embezzlement or larceny
- Punitive damage claims for "willful and malicious" acts
- Debts not listed on the forms filed with the Court
- Drunk driving obligations
