Information on filing for personal bankruptcy
On average,
the amount of debt a person has is rising every single year.
Many people rack up a huge amount of money on credit cards and choose only
to pay the minimum amount each month. When people choose to do this, it
basically means they are only paying off the interest each month and the
amount they owe goes down a very little amount each month. When a person
cannot afford to pay any more than the minimum amount, then they are stuck
with this permanent debt forever. Many people do this with more than one
credit card and it is very easy to build up a debt of thousands and
thousands quite quickly. When this happens filing for personal bankruptcy
can be one of the only options to remove this debt.
There are basically two ways you can file for personal bankruptcy. The
first one is called a chapter 7. This will involve working out all your
assets and income and measuring it against the amount of debt you are in.
If there is no way that you can pay off the debts and quite often these
debts will be wiped out under the personal bankruptcy laws. This will
mean you will never have to repay this debt.
A chapter 13 bankruptcy is slightly different. This is mainly chosen if
the person cannot afford to pay back a debt but has an estate or family
home that they cannot afford to lose. During this form of bankruptcy a
payment plan is generally created which allows the person to pay back as
much as they can afford on a regular basis. This prevents them having to
sell off any assets to pay off their debts. This can be quite a
complicated process and will require the creditor to agree to the amount
you can afford to pay. This will all be handled by your bankruptcy lawyer
who will mediate between the court and the creditor. Hopefully they will
be able to come up with an amicable agreement which suits both parties.
One thing to bear in mind when filing for personal bankruptcy is that
most are made public and some people find it quite shameful. But
obviously quite often it is the only solution to your debt problems and
you have no choice but to do so.
Many people rack up a huge amount of money on credit cards and choose only
to pay the minimum amount each month. When people choose to do this, it
basically means they are only paying off the interest each month and the
amount they owe goes down a very little amount each month. When a person
cannot afford to pay any more than the minimum amount, then they are stuck
with this permanent debt forever. Many people do this with more than one
credit card and it is very easy to build up a debt of thousands and
thousands quite quickly. When this happens filing for personal bankruptcy
can be one of the only options to remove this debt.
There are basically two ways you can file for personal bankruptcy. The
first one is called a chapter 7. This will involve working out all your
assets and income and measuring it against the amount of debt you are in.
If there is no way that you can pay off the debts and quite often these
debts will be wiped out under the personal bankruptcy laws. This will
mean you will never have to repay this debt.
A chapter 13 bankruptcy is slightly different. This is mainly chosen if
the person cannot afford to pay back a debt but has an estate or family
home that they cannot afford to lose. During this form of bankruptcy a
payment plan is generally created which allows the person to pay back as
much as they can afford on a regular basis. This prevents them having to
sell off any assets to pay off their debts. This can be quite a
complicated process and will require the creditor to agree to the amount
you can afford to pay. This will all be handled by your bankruptcy lawyer
who will mediate between the court and the creditor. Hopefully they will
be able to come up with an amicable agreement which suits both parties.
One thing to bear in mind when filing for personal bankruptcy is that
most are made public and some people find it quite shameful. But
obviously quite often it is the only solution to your debt problems and
you have no choice but to do so.