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| Featured Article related to: Financial Services | | | Understanding The Basics Of Bankruptcy |
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Adrian Adams
http://www.articlesbase.com
http://www.articlesbase.com/finance-articles/understanding-the-basics-of-bankrup | | | When individuals or businesses are facing financial difficulties and inhibiting
debt they may seek to obtain relief through the legal process of
bankruptcy. A person may file for Chapter 7 bankruptcy and be able to eliminate
all or part of the debt. However, they may choose to file for Chapter
13 which stretches out the payments on existing debts.
The process of filing for bankruptcy is also designed to provide protection from
creditors. In this case, secure creditors have the assurance of being
reimbursed because they are able to hold a lien on property. Thus, this option
of payment is likely to be more accepted. Most creditors cannot attempt
to collect any form of payment from you while the bankruptcy case is pending.
Any discharged or excused debts are also unable to be collected from
creditors. However, it's best to understand that not all debts are discharged.
Approximately 90 percent of all bankruptcy cases are caused by unemployment,
medical bills, or divorce. While every situation is different the most
common feature of bankruptcy is a large amount of debt incurred. The high
interest rates of credit cards may also be a contributing factor.
Filing for bankruptcy is usually a last resort decisions which is made
personally. The first step however, from freeing yourself from financial burden
is making the best possible decision with the least bit of strain. Once this is
done, you can petition the court. Basically the petition is seen as a
request for protection and relief from creditors. It's only logical that you
must provide some personal details such as assets, liabilities, income,
and expenditures. Most often they will have had to undergo credit counseling
within the allotted time.
Of course the most significant advantage to filing for bankruptcy is getting a
fresh financial start. Another advantage is that after filing, most
collection efforts will stop. It is also unlikely to affect your employment
status. in most cases it will also end all garnishments. However, keep in
mind that laws vary from state to state. Some states may even allow you to keep
all equity in your home while others, may exempt a certain amount.
If filing for bankruptcy is in your future it's best to hire a bankruptcy
lawyer. Use caution when associating with petition preparers, typing
services, or paralegals. Filing on your own is most often not advized but should
you choose to do so educate yourself on the laws and processes in
your state.
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