Is It Right For You?

Drowning in debt

1 in every 72.8 households declared bankruptcy in 2003, a rate that has nearly doubled over the last ten years. Financial experts blame this increase on the growth of consumer debt in relation to several years of economic recession. In other words, consumers with less money available continue to meet their family's financial needs through credit. Is it any wonder many consumers have found themselves literally drowning in debt?

Bankruptcy, an option?

Although bankruptcy provides financial and emotional relief, the resulting black marks on credit reports can continue to haunt consumers for up to ten years. Future creditors view negative listings as a signal that the borrower could not manage their money. This isn't always the case. Sickness, job loss, or other unexpected emergencies can take their toll on a family budget already stretched to the limit.

Reasons to file for bankruptcy

Overwhelming debt
If you are unable to meet your payments each month, and don't see any hope in sight, bankruptcy can give you the breathing room you may need.

Ends harassment
Filing bankruptcy may also stop creditors from filing enforcement lawsuits. After you file bankruptcy, it's against the law for Creditors to initiate or continue lawsuits, wage garnishees, or even telephone calls demanding payments on the items you've listed. Secured creditors, such as a bank holding a lien on a car, will lift the stay once the bankruptcy documents are filed.

If you own a business
Sometimes a business may find bankruptcy is the answer if it becomes necessary to liquidate and terminate.

Personal Bankruptcy - How to protect your rights

When an individual files a petition with the bankruptcy court to get relief from the collection efforts of their creditors, it's called personal bankruptcy. Bankruptcy may be a good option for you if your debts exceed your income and assets.

The decision to declare bankruptcy is not one that should be made lightly. Its effect on your future credit can last up to ten years. Although it's still possible to be approved for credit after a bankruptcy, the offered terms and interest rates will most likely be higher.

Once you have determined that bankruptcy is your best option, you can choose one of two programs. A Chapter 7 bankruptcy will allow the cancellation of most unsecured debt and protects some personal assets. Other assets will then be liquidated by the court and used to pay off creditors.

The other personal bankruptcy option is Chapter 13. This is an interest-free debt repayment plan. The debt is consolidated and the court arranges a repayment plan that pays off all or a substantial portion of the debt and is completed in three to five years.

Regardless of which option you choose, there are certain rights you should be aware of.

Will My Creditors Stop Harassing Me?
Yes. By law, all actions against you must stop once you file your bankruptcy papers. This includes the initiation or continuing of lawsuits, garnishments, and telephone collection calls. Foreclosures and repossessions will also be stopped temporarily.

Can My Boss Fire Me Because I Declared Bankruptcy?
No. Although a bankruptcy is a matter of public record, the court will not notify your boss, your landlord or any other party who is not directly related to the proceedings. U.S.C. Sec. 525 prohibits any employer from discriminating against you because you filed bankruptcy.

How Much Does It Cost To File?
Fees can range anywhere from $500 to $1,200, depending on the law firm you choose and what type of bankruptcy you file. A Chapter 13 requires more work from your lawyer and will therefore be more expensive. Often your first consultation is free, or is included as part of the full legal charge.

Do I Have to Use a Lawyer?
No. You can file a Chapter 7 or Chapter 13 on your own. However, bankruptcy law is a complex field, and the money spent on an experienced bankruptcy attorney can give you peace of mind and may even save you money in the long run.

Can I File for Bankruptcy More Than Once?
Yes. You can file a Chapter 7 six years after your first bankruptcy was discharged. For a Chapter 13, there is no waiting period, if you have paid at least 70% of your unsecured debt. If your bankruptcy was dismissed, you must usually wait 180 days to re-file. There can be exceptions, so be sure and consult a bankruptcy attorney.

How Long Will It Take For My Bankruptcy To Be Discharged?
Three to six months on a Chapter 7, and two to four years on a Chapter 13.

Do I Have To Be In Court for the Hearing?
You cannot miss your hearing. Failure to appear at even one hearing can result in dismissal of your case. If you do not receive notice of your hearing, or in case of emergency, notify your attorney or the court as early as possible.

Can I remove bankruptcy from my credit history?
Thousands of consumers have learned firsthand how legitimate credit repair firms are a money saving solution to their credit history problems. By disputing items that are inaccurate, unverifiable or misleading, legitimate credit repair firms can work to remove bankruptcies from credit reports.



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