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Bankruptcy

Bankruptcy is like getting a divorce from your creditors. There are two primary types of personal bankruptcy: Chapter 7 and Chapter 13. Each is filed in federal bankruptcy court. Bankruptcy cancels your debt. If you have unsecured debt like credit cards Chapter 7 might be the choice for you. Usually, this type of bankruptcy (sometimes referred to as a "straight" bankruptcy) is a routine process that is relatively inexpensive. The bankruptcy process takes about four to six months, normally requires a single trip to the court house, and requires that you complete a two-page petition and other supporting forms. When you file a bankruptcy petition an "automatic stay" goes into effect immediately. This immediately prevents your creditors from trying to collect what they owe. At the end of the bankruptcy process, most of your debts are wiped out and you no longer legally owe your creditors. Unfortunately, many people choose bankruptcy as an easy way out and do not consider all the drawbacks


Thinking of Bankruptcy?
FIRE International proven debt settlement program will make you debt free within 24 months! Our financial advisors are available Monday through Friday 9:a.m. to 5:00p.m. EST Call 888-851-3473 for a free debt settlement consultation.

Nearly every American walks around with some debt. According to the federal government, paying more than 40% of your gross income to pay your debt burden is an indicator of financial distress. Most of us have mortgages, many of us have auto loans or college bills and we surely cannot forget credit cards. The total amount of credit card debt in the United States exceeds 750 billion dollars and the average household has over $9,000 in credit card debt spread over thirteen credit cards! For example, the average forty-year-old person making $50,000 to $100,000 has about $108,000 in debt. Chances are a lot of it is credit card debt. To add to this misery, unemployment rates are at record levels and bankruptcy filings have skyrocketed. Let's face it, two years ago many of us were saying "Let the good times roll." Now many Americans are wondering how to get rid of credit card debt. Perhaps you are considering credit counseling, debt consolidation, or bankruptcy. If you are considering bankruptcy, think again!

What is the advantage of Chapter 13 over a Chapter 7?
A Chapter 13 bankruptcy is ideal for debtors who either have too much income to file for a chapter 7 bankruptcy or have debts that are not dischargeable. Chapter 13 bankruptcy is also ideal for debtors who are behind on their home or business payments. A chapter 13 bankruptcy allows them to make up their overdue payments over time and to reinstate the original agreement.

Can all debt be included in bankruptcy?
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary. Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it. Also debts incurred in recent months cannot be included.

Will I lose everything including my home in bankruptcy?
Each state has established exemptions from bankruptcy court and all consumers should review their state exemptions before contemplating bankruptcy. One final point... if bankruptcy is inevitable, keep your head held high. It is not the end of the world... it just feels like it. Even bankruptcy does pass and you should never lower your head because circumstances overwhelmed you. Just learn from your experience. That's all.

If I have a cosigner on a loan, will the cosigner be affected by bankruptcy?
You should be aware that any cosigner automatically becomes liable for the full amount of a co-signed debt. If this is not what you intend, you should not file or you should make arrangements with the court for repayment. But even debts you do not want included (such as a loan from a friend) must be included since the court does not accept any partiality

Bankruptcy Disadvantages
Bankruptcy is terribly intrusive because you are required to publicly disclose your financial activities over the previous two years. You must also disclose the current property that you own. Additionally, bankruptcy is emotionally draining because many people interpret bankruptcy as meaning failure. Bankruptcy also leaves a long lasting mark on your credit report and does not rid you of student loans, certain child support obligations and certain tax debt.

What other options should be considered?
· First consider whether the debt problem is temporary or will the circumstance last a while. Permanent disability may be far different than job loss. Both are devastating situations but one may or may not require bankruptcy and the other may only require negotiating with creditors.
· Creditors are human beings. They are also business people. They do not want to see bankruptcy for you. They know customer relations are their lifeline and bankruptcy is profit out of their pocket. Therefore, see if they will work with you to lower payments, skip a payment, change billing dates, anything. Do whatever is necessary!
· If all else fails send a smaller than minimum payment. You can not get in trouble for making a bone fide attempt to repay creditors no matter how small the payment.
· Instead of thinking of all the debt you have or the high interest or high balance debt, think of the debt that can be paid off fastest. Is there any way to pay one debt off quickly by selling something and then use that added income to apply towards the next fastest payoff. In other words, do not try to chop down the whole rose bush. Work with cleaning off one or two unsightly limbs first and see where you are. It is far to easy to get tangled up in the thorns and not be able to envision a clean emotional environment.

Get professional help from FIRE International, a legitimate financial services company.

Pay Less Each Month and Payoff Your Debt
FIRE International and its staff of expert debt negotiators pride themselves on providing our clients with the highest level of customer service. Years of success with our debt settlement program is the result of the integrity rich relationships we have built with our clients and the more than 150 lending institutions we work with. Our results have lead thousands of clients on the path to financial freedom. Our financial advisors are available Monday through Friday 9:a.m. to 5:00p.m. EST Call 800-767-3473 for a free debt settlement consultation to inform you about the benefits our debt settlement can provide to you. Review our debt settlement program details, and then, to relieve your debt burden, click here for a free consultation.

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