Rescuing Your Financial Life by Filing for Bankruptcy
If you're one of the hundreds of thousands who are in financial debt beyond repair, it may be time to look into filing bankruptcy. U.S. bankruptcy laws were designed as a "rescue" measure for citizens who are drowning in debt, very often through no fault of their own because of medical bills, disasters, job loss, or other circumstances which even the wisest financial planner couldn't have prevented. Filing for bankruptcy has a number of benefits, not least of which (for the embattled and indebted private citizen) is the immediate cessation of calls and demands from your creditors. Additionally, the bankruptcy process will eliminate or restructure (depending on which route your lawyers recommend) your existing debt.
Bankruptcy lawyers are readily available, and often offer free initial consultations, but you can streamline the process by taking the first few evaluative steps yourself before meeting with the lawyers. First, you'll want to gather information about your existing debts and assets. This will include everything from (in the category of "liabilities") mortgage, car loans, credit card debt, medical bills, and owed taxes, to (on the "assets" side) bank accounts, retirement accounts, savings, stocks, and the value of your real and personal property. This is information your lawyers will need, so you can do the necessary footwork yourself before your initial consultation. The "Schedule 6" series of bankruptcy forms, which help you inventory your liabilities and assets, can be found online at
http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx. Print out these guides and start gathering the required information to maximize the usefulness of your consultation.
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After filing bankruptcy, when will you
qualify for a mortgage: Under certain
circumstances, you can qualify for a new
mortgage after twelve months when filing a
Chapter 13 and two years when filing Chapter 7. |
With that information in hand, your lawyers will
be able to determine which of the two versions
of bankruptcy will be best suited to your
particular circumstances. A Chapter 7 bankruptcy
results in the dismissal of your
debts--you
won't have to repay them--but also involves the
sale of any assets you do still possess. Some
items may be exempted, such as your home (IF its
value is not estimated above a certain value)
and sometimes a vehicle; your lawyers will be
able to help you navigate the details of your
individual exemptions. Chapter 7 leaves you with
a "clean slate" financially, although you'll be
relinquishing most of your existing assets in
the process. Chapter 13, in contrast,
restructures your debts rather than eliminating
them. Your income and assets will be taken into
account and a payment-plan instigated to suit
your circumstances. As part of the process,
agreements will be reached with your
creditors--in some cases reducing the amount
owed (creditors recognize the benefit of having
some of their money paid through this process,
as opposed to having the debtor file a Chapter
7), and in every case relieving you of the
hassle of the constant collection-demands you've
been suffering.
Although the bankruptcy process may look
intimidating to the uninitiated, your lawyers
will guide you through the necessary steps.
You'll be able to get out from underneath your
crushing debt, and back on the road to
rehabilitating your credit--and your financial
life.
More info on the affects of
bankruptcy on
qualifying for a mortgage...
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Can you save your
home with a bankruptcy:
Yes, many times
you can save your home by filing
bankruptcy. Consult an attorney for more
details. |
Disclaimer: We are not
attornies; we are mortgage bankers. The above
article should not be considered legal advice
under any circumstances. Before making any
decisions about filing, consult a licensed
bankruptcy attorney for legal advice. All of the
information contained on this page should be
very useful to anybody who wants the bottom line
when it comes to bankruptcy and mortgage loans.
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