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Chapter 7

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During these most uncertain times, many hard-working Americans are finding themselves overwhelmed by financial problems. It can happen to even the best of people, no matter what tax bracket they may qualify for. If these circumstances do happen to you or anyone you know, it is very important that all options of relief are considered. However, most are finding that filing for Chapter 7 bankruptcy is the best alternative for financial relief.

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After the current bankruptcy law went into effect in 2005, many people were left with the impression that bankruptcy relief was no longer available or too difficult to obtain. Nothing could be further from the truth.

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Like most formidable situations, bankruptcy has earned its reputation based on very few truthful facts and too many false embellishments. The majority of the myths about bankruptcy have begun since the current bankruptcy laws went into effect in 2005. But have no fear, once you know the facts, filing for bankruptcy is not nearly as terrifying as it first appears. Here are some of the most common myths about bankruptcy and what you need to know before you clean your slate.
 
Myth #1: It is difficult to file for bankruptcy.
 

FAQ

You should find out the experience level of your perspective attorney. How many bankruptcy cases do they deal with a year and how long have they been practicing bankruptcy law. They should be honest, efficient, and have a great reputation.

FAQ

Once someone has decided to file for bankruptcy, there are several pitfalls they often fall into. Some decide they want to accumulate debt in hopes of having it restructured in bankruptcy. Others ignore their current situation and pay back family and friends or ignore lawsuits against them. Others make the mistake of trying to save money and represent themselves in bankruptcy or aren’t completely honest about their financial situation with their lawyer. All are costly mistakes.

FAQ

The answer to this question primarily depends on whether or not you would like to keep your home. If you are fine with your home being sold to reconcile your debt with the mortgage company, Chapter 7 is probably the right choice for you. If you would like to remain in your home, then Chapter 13 is your desired filing status.

FAQ

There are numerous myths that people believe about bankruptcy including: that they will never be able to borrow money again; that both spouses in a marriage will have to file for bankruptcy; and that it is really difficult to file for bankruptcy. Other people wrongly believe that filing for bankruptcy helps their credit rating or that you can only file for bankruptcy once.

FAQ

Qualifying for bankruptcy differs from state-to-state and is complicated to determine. The means test was recently established to determine who is qualified for what type of bankruptcy. Suffice to say, around 70 percent of people who file for bankruptcy qualifies.

FAQ

The two types of personal bankruptcy that individuals can file under are Chapter 7 bankruptcy, often called a liquidation plan, and Chapter 13 bankruptcy, often called the debt restructuring plan.

FAQ

The benefits of filing for bankruptcy are numerous. First of all, it restructures your debt, making it more manageable. Bankruptcy also offers peace of mind by taking the burden of dealing with creditors off the debtor and also sheds the obligation to pay all of their debts. Moving forward, filing for bankruptcy helps you get a new start and equips you with useful new financial skills.