Bankruptcy Filing - When Debts Become a Burden

To file or not to file, that is the question! When struggling on paying your debts, bankruptcy filing is an option you can explore to get away from financial pressure. Here are some of the things you should know before making a decision.

What Are Your Alternatives?

To seek non bankruptcy filing alternatives, you should first create realistic monthly budget expenditures. You can include in your list your car and mortgage payments. Each month, after paying your current expenses, you should ask yourself if you can pay off your other debts at current interest rates within 3 years. List down all your debts; calculate what should be paid off and where your money goes. 35 % of your budget should be on housing, 15% on transportation, 15% on your debts, 10% should be go to your savings, and 25% for miscellaneous items.

Think of ways how you can increase your income in order to reduce your expenses. You can even consider selling some of your assets.

Bankruptcy Filing: Chapter 7

This type of bankruptcy is frequently selected by individuals. The debtor is given a fresh start. All your assets, except those exempted, are liquidated. The proceeds are used to pay off all your creditors. This chapter is the quickest and simplest form of bankruptcy and available also for married couples, partnerships and corporations. In most cases, debts discharged in Chapter 7 include:

Personal Loan
\r Credit cards
\r Auto Accident Claims
\r Medical Bills
\r Judgements
\r leases
\r Federal income tax

Bankruptcy Filing: Chapter 13

This is available to individuals with regular income, who have unsecured debts (credit cards) not exceeding $336,900 and secured debts (mortgages and car loans) not exceeding $ 1,010,650. If you received a discharge from Chapter 7, you will not be granted a Chapter 13 discharge within 4 years.

Not Discharged In Bankruptcy

Chapter 7- recent taxes; family support; debts from divorce; student loans; criminal fines; fraud debts or intentional debts.

Chapter 13- Family support; restitution; student loans are non dischargeable.

Bankruptcy Filing Considered

Remember that bankruptcy filing is a long process that requires your time and patience, and if alternatives given are not feasible. These are enough reasons to hire an experienced bankruptcy lawyer to guide you through out complicated processes. Pick a lawyer whom you are comfortable giving all your personal information. Ask questions until you understand everything. A trustee will be assigned to you to make sure all information provided is accurate and complete. Your creditors will be notified that you are filing for bankruptcy, so they will stop any actions they are taking against you.

Bankruptcy filing is a personal decision, influenced by serious amount of debt and your ability to pay the full amount. Being annoyed by creditors is a nerve wracking experience. If you are stressed by your financial situation and it interferes with your work, sleep, considering bankruptcy is the healthy option for you. But this decision should not be made just to stop annoying creditors but also to give you a chance to start over.

Kevin Wynn owns and operates http://www.filingbankruptcyinsights.com, a site dedicated to providing information about the various types of bankrupty(s) and bankruptcy alternatives. Filing Bankruptcy