Until recently, credit was easy to obtain. In the light of the financial crisis, institutions and banks have become less inclined to extend credit and that same crisis has suddenly brought massive insecurity to many as they struggle to cope with high levels of debt.
Credit cards have played a major role in this. We all know how easy it is to live beyond one’s means by supplementing our spending with credit card debt. The problem is that it has to be paid at some stage, and for some, just the monthly interest is more than they can afford.
Some short term relief can be found using balance transfers to cards with lower interst rates, but a long term solution has to be arrived at eventually.
Declaring yourself bankrupt should only be considered when all other options have been examined in detail. The appeal of bankruptcy is the lure of starting one’s financial life again, with all debt taken away, a fresh start.
In addition, various companies have sprung up in recent months offering to handle your bankruptcy case for you, without fully explaining the consequences of personal bankruptcy. These should be treated with care.
Although it may seem expensive, I would recommend that you hire a specialist bankruptcy lawyer from the outset, one that understands your state’s bankruptcy laws. This is your financial future at stake and you want the best advice you can afford.
Before declaring yourself bankrupt, you need to check that you are, in fact eligible. There are 3 possible reasons for ineligibility.
If in the last 180 days you have, of your own accord, dismissed your own bankruptcy case you are ineligible.
If you have been issued with a bankruptcy discharge within the past 7 years, you are not eligible to file again.
If you have had a petition for bankruptcy discharged (you did not adhere to the bankruptcy code of practice) in the last 180 days you are ineligible.
Assuming you do not fall into any one of those criteria, you may proceed.
Chapter 13 and Chapter 7 are the most common chapters to file bankruptcy under although there are others. Your lawyer will advise.
There are advantages and disadvantages to both chapter 13 and chapter 7 bankruptcy. Chapter 7 is often the preferred chapter because although you have almost all your assets sold, any debt still outstanding is simply written off (with some exceptions), giving the petitioner a clean financial slate, whereas chapter 13 is a repayment plan over a 3 to 5 year period.
For more interesting information about declaring yourself bankrupt, including advice on things to consider before filing and advice on lawyers, visit www.declaringyourselfbankrupt.net. Grab a totally unique version of this article from the Uber Article Directory
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