Avoid Bankruptcy If You Can
If you can help it, avoid bankruptcy. Doing so could save your credit and not require you to undergo credit counseling. Thanks to the newly passed laws, any person that files bankruptcy is required to obtain credit counseling.
This is in efforts of discouraging people from bankruptcy filing. The law also requires that any person wishing to file bankruptcy must have their debt and finances evaluated to figure out what chapter of bankruptcy can be filed. Within six months of the bankruptcy filing, mandatory credit counseling is required.
When bankruptcy was first created, it was to give debtors a new start in life. Bankruptcy relieves people of their obligations when they are drowning in a lake of debt. There are two specific bankruptcy types within the United States Law, these are:
Chapter 7
Chapter 13
The most common form of bankruptcy is a Chapter 7 filing. This type of filing allows the debtor the ability to retain exempt property and still find relief from their creditors. However, a Chapter 7 bankruptcy will remain on the credit report for up to ten years.
The less common form of bankruptcy is the Chapter 13 filing. This works similar to a payment plan. You are required to pay your way out of debt and this type of bankruptcy only remains on your credit report for up to seven years.
There are many reasons to avoid bankruptcy. One is that when a person has filed bankruptcy there is often an attached social stigma. Which means people may be thinking you have little morals, you do not have a good job, or you are simply poor. Another reason to avoid it is that the bankruptcy filing will haunt you for many years. If you ever try to obtain credit or even a job, you may find a question have you ever filed for bankruptcy. Of course, many people opt to check the no box, if their bankruptcy is more than ten years past. However, this is considered fraud, which means you could be prosecuted in the court of law if they ever discovered the truth.
The best thing to do is try with all your might to avoid bankruptcy. However, if you have no other alternative and you must file bankruptcy, it is important that you obtain an advisor right away. It certainly is not the end of the world and you can rebuild your credit over time.
Ken Charnley is a personal finance publisher whose website Bankruptcy Loans is dedicated to quality information on Bankruptcy faqs & Loans. For all your Bankruptcy faqs needs visit and Apply for Bankruptcy Loans Online
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