Personal Bankruptcy Information-Easy Way To Claim Bankruptcy

The number of people claiming bankruptcy has increased tremendously with the recent economic crunch. It is estimated that the number is as hi as 34% and the calculated total number of bankruptcies is around 1.4 million new cases for the year 2009. We will assist you to know the process of bankruptcy filing at www.bankruptcyonly.com. Major filings consists of the chapter 13, which implies that individuals are making use of bankruptcy to avoid foreclosure and other respective assets during this turmoil, while repaying small parts through repayment plans. Following are some frequently faced doubts by consumers.

What is bankruptcy?

It is a process by which the debtor is granted court ordered relief from all his debts. Bankruptcy is valuable and very essential in many cases. However, each person who has financial hardship should not file for bankruptcy.

Do I need to declare bankruptcy?

This question cannot be answered quickly in a “yes” or “no”. The best way to find this out is to discuss your situation and problems with your credit counselor. This will enable you to get an unbiased opinion and calculate the costs and advantages of bankruptcy. Personal bankruptcy is of two types:

1. Chapter 7: what is chapter 7 bankruptcy? In this chapter, your property and assets are liquidated with specific exceptions like home and your personal automobile but everything above limits is sold to the bidder who bids the highest and is used to repay your debt. Not all people are eligible for chapter 7 bankruptcy since there is a means test taken to see if you have the capacity to repay a part of your debt.
2. Chapter 13: it is known as the wage earner’s plan because it uses a part of each of your paychecks to repay your debt. After chapter 13 bankruptcy filing, the trustee makes a plan to repay your debt calculated based on the amount you can pay out of your personal earnings. This can be anywhere from 10-100 percent of the amount due with your creditors. Even if you are successful in paying ten percent of the amount, the bankruptcy filing will be considered paid in full and the creditors cannot try to collect any more debt.

Other options:

• Financial management: a good financial manager will enable you pay your bills and provide you some allowance till you get out of debt. A counselor can help you create a new budget.
• Work out plans: work out with creditors to create new repayment plans that can result in a win-win situation.
• Refinancing: ask your bank if it is possible to refinance your home and repay the higher interest debts.

Hence, to get a correct and resourceful suggestion on your financial conditions, you must first consult a nonprofit credit counselor and share all your personal bankruptcy information by getting help from the government. You should not declare bankruptcy if it is not essential.

Obtain details of chapter 13 and chapter 7 bankruptcy here.