Not a lot of people want to make the decision of when to file bankruptcy, but you'll also find that there is some point where it just may have to be done. You'll want to keep in mind that bankruptcy will affect your credit rating and will have other ramifications.
Filing for bankruptcy is only the last resort. When you're constantly borrowing money from one credit source to pay another or if you're taking cash advances of more than $500 to pay for living expenses, then you may want to file for bankruptcy. If you borrow to meet regular expenses like food and utility bills or have stopped answering your phone because the only calls you receive are from creditors, then filing for bankruptcy may be the only option.
A way for you to get out of your hard financial times is bankruptcy and it's what you have to do when you can no longer afford paying your existing debts.
When it comes to bankruptcy, the most commonly filed form is chapter 7 and 13.
For the individual, the most common is chapter 7. It is the complete erasing of qualifying debt. The debtor is then released from all repayment obligations. Don't take chapter 7 bankruptcies lightly because they're very serious. While giving you an immediate fresh start in repairing your finances, it remains on your credit report for 10 years. You'll be noted as a person who is financially irresponsible and you'll be seen as a high risk.
With chapter 13, it will be less harmful to your credit. You'll be working to repay your debts on a payment plan so there are still marks against you but you won't look like you're financially responsible because but you're still considered a credit risk. Unlike in chapter 7 where they will start selling your assets to pay back your creditors, with chapter 13 you'll be able to keep your home.
Before you consider filing for bankruptcy, first go through all available options. Debt counseling, consolidation loans, a second job and other options may allow you to reduce your debt and avoid bankruptcy. Besides helping save your credit record, you can also improve your chances of getting credit sooner. Before taking any action, ask a bankruptcy lawyer for advice if there seems to be no other option.
Filing for bankruptcy is only the last resort. When you're constantly borrowing money from one credit source to pay another or if you're taking cash advances of more than $500 to pay for living expenses, then you may want to file for bankruptcy. If you borrow to meet regular expenses like food and utility bills or have stopped answering your phone because the only calls you receive are from creditors, then filing for bankruptcy may be the only option.
A way for you to get out of your hard financial times is bankruptcy and it's what you have to do when you can no longer afford paying your existing debts.
When it comes to bankruptcy, the most commonly filed form is chapter 7 and 13.
For the individual, the most common is chapter 7. It is the complete erasing of qualifying debt. The debtor is then released from all repayment obligations. Don't take chapter 7 bankruptcies lightly because they're very serious. While giving you an immediate fresh start in repairing your finances, it remains on your credit report for 10 years. You'll be noted as a person who is financially irresponsible and you'll be seen as a high risk.
With chapter 13, it will be less harmful to your credit. You'll be working to repay your debts on a payment plan so there are still marks against you but you won't look like you're financially responsible because but you're still considered a credit risk. Unlike in chapter 7 where they will start selling your assets to pay back your creditors, with chapter 13 you'll be able to keep your home.
Before you consider filing for bankruptcy, first go through all available options. Debt counseling, consolidation loans, a second job and other options may allow you to reduce your debt and avoid bankruptcy. Besides helping save your credit record, you can also improve your chances of getting credit sooner. Before taking any action, ask a bankruptcy lawyer for advice if there seems to be no other option.
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