Home | Popular Articles | FILE BANKRUPTCY (FAQ)

How To File For Bankruptcy - When To File For Bankruptcy

People usually file for bankruptcy when they've suffered a serious setback like loss of a job or an illness that's affected their ability to pay their bills

Filing for bankruptcy is a serious decision and luckily, one that can protect us, but it's often abused. Having the legal right to file bankruptcy can save someone whose open to lawsuits, creditor harassment or wage levies.

Besides the stress of having creditors pounding down your door, you have to consider the legal implications for unpaid debts that cross over in terms of your income or money in your bank accounts. Left ignored, eventually creditors will come after you if you stop paying your bills.

How long you can hold them off depends on your skill level. Once they do, odds are they'll garnish your paycheck or levy your bank account. This is serious because you cant pay your bills or living expenses if this happens.

A bankruptcy filing can stop;

• Creditor lawsuits

• Wage garnishments

• Bank account levies

• Provide a fresh start

• And protect your car, retirement or house

When to file bankruptcy
That depends entirely on your unique situation. Normally you can go around 6 months or so without paying your unsecured bills (credit cards or medical bills) before the creditors will file a lawsuit. During that time, its a good idea to save up some cash so you can afford to file for bankruptcy.

A good local bankruptcy attorney can help you determine if bankruptcy is your best option and make the filing process much less confusing. The attorney will go over the debts you have and be able to guide you on what debts can be included in the bankruptcy filing and which debts should take priority.

If you are considering bankruptcy don't use your credit cards
Whatever you do, dont use your credit cards once you realize you cant pay them because that could affect your ability to file for bankruptcy. A judge may assume you ran up charges on purpose and therefore not approve your bankruptcy petition. Usually within 90 days of filing is a safe distance, but even longer is better.

What about car payments or secured debts & a bankruptcy?
Secured debts like your mortgage or car will not be so lax without being paid. Anything with collateral attached to it moves up the ladder in terms of priority as far as your creditor is concerned. Not paying your car payment or mortgage is generally a bad idea. All of your secured debts as well as your living expenses should be paid.

If you cant pay your car payment the creditor will take the car back. By filing for bankruptcy you can hold off the repossession and have a bankruptcy attorney help you determine the best way to handle the bill. If you still need your car, you can enter into a reaffirmation plan (keep paying for the car) with the creditor, otherwise you can surrender the car. The remaining balance of the car then becomes unsecured and is usually included in the bankruptcy filing.

What debts can't be included in a bankruptcy?
Normally student loans and tax debts. Unless your student loans are held by a private nonfederal lender, you wont be able to include them in a bankruptcy filing. The good news though, is that you may able to work with those lenders to reorganize the debts or rehabilitate them. Once you no longer have to pay all your other debts then perhaps those will be manageable.

What type of bankruptcy do I need?
That depends on your assets and liabilities. Most chapter 7 bankruptcies are for people with lots of debt and no assets. A chapter 13 bankruptcy is a reorganization of your debts that is paid back over time. Again, a bankruptcy attorney is the best person to tell you which one fits your personal circumstances.

How long will the bankruptcy affect my credit?
A bankruptcy filing remains on your credit reports for up to 10 years. BUT, and this is often overlooked - especially by credit experts... Your credit is probably already a mess filled with collection accounts if you haven't been paying your bills. A bad mark on your credit lasts 7 years and you are still open to creditor lawsuits so a bankruptcy filing that lasts for 10 years and provides a fresh start and protection from lawsuits doesn't seem like such a bad idea.

Tell your bankruptcy attorney EVERYTHING
The last thing you want is your bankruptcy filing dismissed because you lied. A bankruptcy attorney can't help you if he doesn't know the facts of your case. Be honest and tell the bankruptcy attorney everything about your assets and liabilities. Dont make any decisions like transferring property or money before you talk with a qualified bankruptcy attorney.

How often can a person file bankruptcy?
Normally a bankruptcy discharge is every eight years so be sure to include everything in your bankruptcy. Leaving out a creditor -- even a family loan can be a headache to add later. Besides, you dont want someone coming after you later - especially after your bankruptcy has been discharged.

What is the difference between a BK discharge and dismissal?
A discharge in a bankruptcy means it was successful. A dismissal means it was canceled. And yes, if canceled, you are again open to creditor lawsuits as if you never filed.

What is an "automatic stay"?
An automatic stay means that your creditors must cease collection activities while your bankruptcy is in process.

Is a "reaffirmation" a good idea?
That depends on you. A reaffirmation can give you the ability to stay on good terms with your creditor (usually a credit union where you bank). A bankruptcy attorney will advise you if he thinks a legal reaffirmation is a good idea. Normally, you should never EVER enter into one without the guidance of your attorney.

Need a Bankruptcy Lawyer?

FIND ARTICLES 7 Year Rule On Credit Reporting Accord & Satisfaction: How to Annual Free Credit Reports Attorney Generals By State Avoiding Debt Collectors Bad Credit = High Insurance Rates Bad Credit Time Limits Credit Reports Bankruptcy FAQ Bankruptcy & Your Car Battle Debt Collectors & Win Best Credit Repair Resources Best Debt Strategies Cancelled Debts & The IRS (1099C) Cease & Desist Help Check Kiting & Fraud Child Support Issues Collection Agencies Locator Collection Laws By State Cost Of Your Bad Credit Credit Repair By Debt Settlement Credit After A Bankruptcy Credit Cards for Bad Credit Credit Card Billing Rights Credit/Collection Letters Credit Repair Scams Credit Report Inquiries Credit Repair By Lawsuit Credit Repair How To 623 Credit Repair Method Credit Re-Scoring Debt Collector FAQ Debt Consol Vs. Counseling Debt Negotiations Vs. Debt Management Debt Settlement Tactics Divorce And Your Credit Reports DIY Credit Repair Tips Facta Credit Repair Fact Act (CRA Law) FCRA Credit Repair Common FDCPA Violations FCRA Rights FDCPA (PDF) FDCPA Rights Fico Credit Scoring Financial Blunders To Avoid Garnishment FAQ Gramm- Leach Act How To File Bankruptcy Innovis Credit Bureau Judgments FAQ ID Theft Inquiry FAQ: Credit Reports Medical Collections FAQ MIB Record Mortgage Issues New Breed Of Debt Collectors Opting Out Of Marketing Car Loan Default Consequences Repossession FAQ (car) Restrictive Endorsements Small Claims Court FAQ Soldiers & Sailors Civil Relief Act Social Security Statement State By State Laws & Codes Statute of Limitations (SOL) Student Loan FAQ Student Loan Default Student Loan Rehab Supremacy Clause (State vs. Federal) Tax Lien FAQ TCPA & Bill Collectors (Cell Phones) Top 10 SelfHelp: Credit Repair Vacating A Judgment Validation Of Debt (VOD) VOD Strategies (Part II) What is Credit Repair Your Basic Credit Rights Financial Calculators Legal Research Salary Wizard Family Law Free Legal Forms Custom Docs/ Forms Our Blog See All Articles FIND SERVICES Business Debt Settlement Credit Cards Credit Reports Debt Management Debt Consolidation Debt Negotiations DIY Credit Repair DIY Debt Settlements Family Law Full Service Credit Repair Tax Settlements

Stay Connected to Us Socially! Follow our Blog for tips! -More Services To Help You- -Ultimate DIY Credit Repair: Download Now! -Credit Repair Attorneys -Debt Settlement Help -DIY Debt Settlement Coaching -FIND Local Attorneys (BK, Criminal, Consumer Law) -Settle your Taxes -Credit Reports -Debt Management (Counseling) -Find Credit Cards

Find More Credit/Collection Articles:
Repossession & Your Car | Bankruptcy - All you need to know | Statute of Limitations | Restricted Settlements | Judgments | Sample Letters | Credit Re-Scoring | Debt Management vs. Debt Negotiations | Credit Counseling vs. Debt Consolidation | DIY Credit Repair Help | How To Improve Your Credit History | Dealing with Tax Liens | Delinquent Student Loans | Collection Agency Abuse Tips | Best Credit Repair Resources on the Web | Credit Repair & Common Sense | Credit and Divorce | Attorneys General By State | Car Loan Default Consequences | Cease and Desist Letter | Collection Laws All States | Dealing with Medical Collections (HIPPA) | Credit cards & bad credit | How to fix your credit | What can a credit repair service do for you? | See All Credit Repair Articles--->

Find Services: Credit Repair & Consumer Attorney | Credit Repair Companies | Debt Settlement Firms | Bankruptcy Attorney | See All Credit Services --->

Popular Tags: VOD | SOL | RE | DIY | Settlements | Disputes | CRA | CA | OC