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Bankruptcy Chapter 13

Bankruptcy is a legally declared inability or impairment of ability of an individual   or organization to pay their creditors.   Personal bankruptcy is initiated by the individual in debt.   Once an individual has become so far into debt they may view the pro’s and con’s of bankruptcy as a way to take action against their debt.   Bankruptcy will discharge most debts however it has the disadvantage of making it more difficult to borrow in the future, as bankruptcy will remain on your credit report for up to ten years.   In most situations with   an individual seeking bankruptcy as an option their credit is usually already in bad shape so the bankruptcy would allow for a fresh start.

Although bankruptcy should be treated as a last resort to solving your financial problems, there are many signs when it may be your best option to make.   According to lowermybills.com a few signs were:
• If you have personal debts that are well beyond what you can pay and professional advice, such as a credit counselor, tells you there is no alternative for you.
• If our business is not generating the revenue to support its bills and you have too much overhead, and too many debts.

Because of the rising amounts of individuals filing bankruptcy, The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) amended the U.S. Bankruptcy Code effective October 17, 2005 that prior to filing a bankruptcy case, an individual must obtain some consumer credit counseling from an entity approved by the U.S. Trustee within 180 days of the date of filing a bankruptcy case.   To find an approved agency you can visit the Trustee’s website at www.usdoj.gov/ust and click on “Credit Counseling and Debtor Education.   These agencies are allowed to charge a fee for their services, but they must provide counseling for free or reduced rates if you cannot afford to pay.   After you have filed your bankruptcy and your lawyer receives a case number for you it is also necessary that you take a Debtor...