Bankruptcy

Sometimes bankruptcy is the only solution. If you want advice on if this is the right path to your financial freedom, take a few minutes to talk with one of our debt professionals. You might have more options than you think.

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Should I Consider Bankruptcy?

Bankruptcy, or simply the condition in which an individual is unable to compensate their debtors, is a common occurrence in America. From 1980 to 2005, more than two million bankruptcy cases have been filed by debtors across the country. In many cases, bankruptcy is not a matter of reckless spending, but it is a definite matter of financial hardship for many people who simply cannot afford to deal with sudden unexpectancies such as job loss and costly medical bills.

Truth be told, many financial experts will discourage filing for bankruptcy to escape your debt. Make sure you’re fully informed before going down this road. Here is some vital information to help you get more affiliated with the current bankruptcy laws.

Bankruptcy Law is on Your Side

Surprisingly, bankruptcy is an essential fabric in the United States Constitution. The American founders were fixated on creating a system in which individuals burdened with a massive debt could relieve themselves and build a fresh start. According to the U.S. Bankruptcy Code, here are ways people can choose to file bankruptcy.

  • Liquidation – This is the basic chapter of bankruptcy. In this process, the court will assign a trustee to oversee the liquidation of all of your assets to pay your debtors. Though, this doesn’t necessarily pertain to your vital possessions, such as your primary residence or vehicle.
  • Adjustment of Debts – For those who don’t apply to liquidation due to income constraints, this process entails paying off your debtors within three to five years, using your regular income and other assets.
  • Reorganization – In this process, debtors are mandated by the court to submit a plan to reorganize their finances to pay back creditors in 120 days. This chapter allows individuals to pay back their debt and afford their living expenses.

As you can see, there are several options if you plan to file bankruptcy. To discover whether bankruptcy is the right course for you, contact Americor to learn all your options.

Bankruptcy FAQ's

Learn what bankruptcy is all about before making any major decisions.

Chapter 7 Bankruptcy Help

For many debtors looking for relief from their creditors, Chapter 7 bankruptcy help is the best solution to growing debt and aggressive collection efforts. Filing a petition for Chapter 7 bankruptcy places an automatic “stay” on debt collection efforts until the court has an opportunity to sort out your debts.

Under Chapter 7 protection, the legal code provides for the liquidation, or sale, of your nonexempt property and the distribution of the proceeds to your creditors to fulfill your obligations. Chapter 7 is often the last opportunity for debtors to end the cycle of debt that you find yourself mired in as a result of your bills.

What You need to Know about Chapter 7 Bankruptcy

Unlike Chapter 13 protection, Chapter 7 bankruptcy does not require that you file a repayment plan. Chapter 7 might be the right solution when:

  • Your total debts equal more than half your annual income
  • You do not have many assets
  • The bulk of your debts are dischargeable
  • Repaying your debt will take longer than five or six years

Not all debts are dischargeable under Chapter 7 bankruptcy including child support obligations, student loans, and recent taxes. 

Chapter 13 Bankruptcy 

For debtors looking at mounting bills and a clear path out of debt, Chapter 13 bankruptcy might be just the thing to put your financial problems in your rearview mirror. Under Chapter 13, individuals with regular incomes are given the time and protections to help reorganize their debts, and unlike Chapter 7 bankruptcy protection, you do not run the risk of losing your assets if you comply with all the bankruptcy court’s orders. In many ways, Chapter 13 help is like getting a consolidation loan where you pay the Chapter 13 trustee before they pass the money on to your creditors.

What You need to Know about Chapter 13 Bankruptcy

Chapter 13 protection is an excellent way to reorganize your debts. Gaining protection under the bankruptcy codes is a process rather than an event, so be prepared to furnish a great deal of information to satisfy the bankruptcy trustee. Just some of the important information you will need includes:

  • A list of all creditors and the amount of money you owe
  • Detailed accounting of your income including amount and frequency
  • A list of all your property and assets
  • A detailed list of monthly living expenses

If you have the wherewithal to repay your debts, but just need some extra breathing room to reorganize what you owe your creditors, you can call Americor to get your questions answered.

I Am Bankrupt – What Do I Do?

While filing for bankruptcy might seem like the end of the world, the reality is that it can be the beginning of a debt free life, wherein you can lay those fears to rest. With the right bankruptcy help, you can get through it stronger than ever.

As you probably know, once you have filed for protection under the nation’s bankruptcy codes, the action will stay on your credit for a decade following the judgment. However, you do not need to wait patiently twiddling your thumbs for ten years because there are steps you can take to regain control of your credit. If you are wondering what to do if you’re bankrupt, a bankruptcy “what to do” list is a great idea.

Bankruptcy “What To Do” List

There are several proactive steps that you can take in the aftermath of filing for bankruptcy, and this bankruptcy “what to do” list can help guide your recovery. Steps to a faster recovery include:

  • Check credit score for discharged debt
  • Reestablish credit as soon as possible
  • Keep older cards active
  • Do not apply for a flood of credit cards

As mentioned, bankruptcy protection is not the end of the world and you can take on the rest of your life with a clean slate.

Will Bankruptcy Affect My Credit?

The short answer to that question is yes. Bankruptcy will affect your credit, but when you account for ongoing collection efforts and non-payment of your debts, your credit rating is already taking a serious hit from the negative collection efforts. Bankruptcy, while taking a toll on your credit for a significant amount of time, offers at least the ending of your financial hardships within a decade of your filing. Conversely, ongoing legal and collection efforts will continue to erode your credit standing.

Bankruptcy will affect your credit in several key ways that can have both short term and long term implications for your credit.

  • Bankruptcy stays on your credit for 10 years
  • Credit score drop of 160 to 220 points
  • Difficulty reestablishing credit
  • Negatively impact ability to rent

A bankruptcy is not the end of the world, although at times it may seem the case as you work through the process, and the main antidote to that is time.

Bankruptcy Attorney’s 

Changes in the bankruptcy laws have made it easier for consumers to navigate the myriad paper trails needed to successfully file for protection under the nation’s bankruptcy codes. In fact, upwards of 10% of filings, primarily Chapter 7 filings, are filed without any legal help or consultation. However, every debtor’s situation is different, and for complicated filings it might be a good idea to consider hiring a bankruptcy attorney.

Complicated filings might include instances where you have collateral loans like automobiles and mortgages, or you are hoping to reaffirm a debtor agreement to help redeem the property in question. If you own more than the basic household goods, clothes, and furniture that you need to protect, then consider reaching out for legal representation.

Where to Find a Bankruptcy Attorney

With something as important as your financial future on the line, you don’t want to risk picking the wrong attorney to represent you before the court trustee. While those with a lawyer in the family won’t have this problem, the majority of people looking for representation might not know where to start. Here are some good places to investigate when looking for a bankruptcy attorney:

  • Personal referrals
  • National Association of Consumer Bankruptcy Attorneys
  • Search Engines
  • Online Referral Services
  • Local Bar Association

If you have been garnished, served a subpoena, or otherwise been threatened with legal action, you should consider reaching out to a lawyer specializing in bankruptcy.

How do I Get Help Hiring a Bankruptcy Attorney?

The financial experts here at Americor are here to help you understand the bankruptcy process and the role a bankruptcy attorney can play in that process. Discover the best debt solution plan for your individual situation, as well as the important role played by legal representation by your side. 

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