There are many things about personal bankruptcy that make it a complex and often intimidating subject, especially because it presents challenging questions that usually come right in the middle of a difficult personal time. Bankruptcy can be brought on by many different circumstances that are sometimes beyond personal control, and having the right information on hand can make this time infinitely more manageable for you.

Bankruptcy alternatives
Bankruptcy is a serious measure that you should take only once you have considered all the alternatives that are open to you. Remember that during times of personal and financial hardship, the worst thing you can do is avoid confronting these issues. On the other hand, acknowledging your situation and talking to your creditors puts you in a responsible position that will be respected. Your creditors might be able to offer you more lenient payment plans or other solutions to meeting your debt. Debt consolidation is an avenue that many people take in order to stop harassing phonecalls from creditors and compile their payments into a single and simplified account that is managed by a third party, usually a non-profit debt management agency. Take the time to speak with a debt counselor or financial professional and thoroughly explore all the solutions you might not have thought of. There are several sources of quality information online that present easy-to-understand explanations of bankruptcy alternatives and debt consolidation.

Types of bankruptcy
If you do determine, however, that personal bankrupcy is your best possible solution, then you should take the time to understand the different bankruptcy chapters and what they entail. Personal bankruptcy almost always falls under either chapter 7 or chapter 13 of the bankruptcy code, and they each differ in important ways. Chapter 7 fully discharges your debts by liquidating your assets in an attempt to make partial repayment to creditors. This is the most common type of bankruptcy. Chapter 13 establishes a new arrangement between you and your creditors so that you can eventually repay most or all of your debt in a way that is more manageable to you. While challenging, this type of bankruptcy offers greater flexibility and greater chance to rebuild credit.

Both types of bankruptcy are designed to offer you relief from overwhelming debt and give you the chance to make a new start in life. When you file personal bankruptcy you will be granted a "stay," which means that you are protected from collection attempts, employee discrimination, and other damaging measures. Bankruptcy gives you the means to get out from under the mountains of debt that seem to make it impossible for you to meet your goals. There are also many economic programs and consumer opportunities specially designated for the particular needs of those who have had to file personal bankruptcy.

While personal bankruptcy presents a host of advantages when you are unable to meet your outstanding debts, it is not meant to be a totally simple solution that can be taken to get out of your responsibilities. Bankruptcy makes a great deal of your private financial information visible. It will remain on your personal credit history for up to ten years and will be visible to employers and lenders. Chapter 7 bankruptcy means that you will probably end up losing the majority of your non-exempt property and cash. Chapter 13 usually allows you to keep most of what you own, but you are committed to meeting the repayments as agreed in a very strictly monitored agreement.

Who can file and how it works
Any individual can file for personal bankruptcy. In a married couple, either person may file independently, or the couple may file together. Bankruptcy begins when you file a voluntary petition and all the supporting paperwork. This is a request for the bankruptcy court either to discharge all your debts (Chapter 7) or approve a new payment agreement (Chapter 13). The bankruptcy court trustee then makes your creditors aware of your filing and you are granted a stay to protect you from collection attempts while creditors review your information. You will have to attend a "meeting of creditors" along with your trustee (which creditors almost never actually attend). Any questions or relevant points are addressed during this meeting. After a waiting period that can take from 3 to 5 months, you will attend a hearing in which the bankruptcy court either discharges your debts (in chapter 7 cases) or approves your new repayment agreement (in chapter 13 cases).



(in Oakland, CA)


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