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What Is Bankruptcy, and How Can It Benefit or Harm You?

What Is Bankruptcy, and How Can It Benefit or Harm You?
"""What is Insolvency?
If you are contemplating filing for bankruptcy due to an insurmountable amount of debt, you should carefully consider all of your options before making a decision. Ask anyone who has actually filed for bankruptcy, and they will tell you that it is a lengthy process that can cause your credit score to plummet. Regardless of your circumstance or reason for contemplating bankruptcy, if you are contemplating filing a BK, you should seriously consider all alternatives to bankruptcy and your options. In 2010, there were 1,531,997 bankruptcy filings. The majority of these filings were due to unmanageable credit card debt and living beyond one's means.

7th Chapter

Chapter 7 is commonly known as liquidation.
Four to six months pass between the date of filing and the final discharge.
Chapter 7 can only be filed once every six years.
Income must be less than the state's median income.
Depending on the state in which you file, you may be able to retain your home's equity.
Personal property will be liquidated to satisfy debts.
Chapter 7 is typically reserved for individuals with few assets, no income, and a substantial amount of debt.
Will have a ten-year impact on your FICO score.
There may be ongoing lawsuits after you file.

13 Chapter

The quantity of debt that must be repaid will depend on your income, not the amount owed.
There may be debt limits in place.
One of the primary advantages of Chapter 13 is that it temporarily halts the foreclosure process, allowing you to pay off your debts.
Remains on your credit report for seven years.
Additionally known as a debt settlement

The 17th of October, 2005 marked the date when new bankruptcy laws went into effect. At least 180 days prior to filing, individuals were required to obtain credit counseling from a government-approved credit counseling services agency.

What's wrong with declaring bankruptcy?
Numerous debt resolution and financial experts concur that a person should do everything possible to avoid declaring bankruptcy. Insolvency is a difficult procedure that should not be viewed as an easy way out. A bankruptcy can leave a negative note on your credit report for up to ten years, making it difficult to apply in the future for loans, credit cards, and a mortgage. If you believe that your debt is unmanageable, a good first step is to seek the assistance of a government-approved credit counseling agency to determine your options.

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"What Is Bankruptcy, and How Can It Benefit or Harm You?" was written by Mary under the Finance / Wealth category. It has been read 202 times and generated 1 comments. The article was created on and updated on 01 June 2023.
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