Is Bankruptcy Right For Me?

Friday, February 12, 2010

In these economic times, many people are beginning to consider filing bankruptcy as a solution to their financial situation. Bankruptcy helps many people who find themselves in financial trouble, but it is important to understand the basics of bankruptcy before making any decisions.

What is Bankruptcy?

Bankruptcy is a legal process by which a person or business legally declares that they cannot pay their debts. The person who files bankruptcy meets with a bankruptcy judge to receive a discharge of their debts or to work out a payment schedule, depending on the type of bankruptcy the person files. The two most common types of bankruptcy filed by individuals are Chapter 7 and Chapter 13 bankruptcy.

How Can Bankruptcy Help Me?

Bankruptcy can eliminate most if not all or your unsecure debt. Additionally, you will receive an automatic stay from your creditors. This means that the court will order your creditors to stop all actions against you.

The Automatic Stay from the court legally prohibits creditors from taking ANY action against you. Basically, you can immediately stop any of the following:

· Calls from your creditors

· Any collections against you

· Wage garnishment

· Lawsuits

· Foreclosures

· Contact of any kind from creditors

Should I File Bankruptcy?

Some times, the people who need bankruptcy the most do not even know it. The following list is common signs that bankruptcy might be a good option for you.

· Your debt is more than your annual salary, not including house and car debts.

· You have to buy basic items like food, clothes, gas, etc on credit.

· Your medical bills total over $5,000.

· Your debt payments are more than 25% of your take-home pay.

· You are being sued.

· Your wages are being garnished.

· Your debts continue to increase every month.

· You are considering getting a loan to pay debt.

· You are often late on your payments.

Filing bankruptcy is an important decision that you should make only after careful consideration. You should seek professional advice before making any decisions on bankruptcy.

Submitted By:
Archie Timmons
** No compensation was recieved for this article.

1 comment:

  1. Excellent article! Simple & educational.


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