howtogobankruptpage1aWhen things get bad enough that you start thinking about how to go bankrupt, it’s also time to think about whether or not there are other options you should first consider before filing for personal bankruptcy.

If not, then you need to know when and how to file bankruptcy, and need to determine if you should use an attorney or file bankruptcy yourself (perhaps by using the new way to file bankruptcy online for do-it-yourself filings that are reviewed by a bankruptcy attorney prior to filing).

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So What Exactly Is Bankruptcy?

While bankruptcy was actually first created to punish people with financial difficulties the more current philosophy is that it is supposed to help folks in trouble (the word “bankruptcy” actually comes from the Italian words “banca rotta,” or “broken bench,” which reflected the practice of destroying a tradesman’s work bench if he didn’t pay his debts … doesn’t sound like a brilliant idea for getting your money back, but maybe just getting revenge was more important),

No matter what your situation … lost your job or income, medical problems and bills, a mortgage that reset at a higher interest rate, too many bills … bankruptcy is often the solution for many to get their lives back on track.

So, Let’s Cut Right To It And Examine Your Options:

1. Bankruptcy Alternatives

There are alternatives to bankruptcy. In fact, you should exhaust ALL alternatives, as filing bankruptcy should usually be considered a last resort. Some of these alternatives include:

Selling Assets (to pay off your obligations)
Settlement Of Your Obligations (it’s relatively easy to settle your debts for less than full amount)
A Short Sale Of Your Property (even if you owe more than you can sell it for)
A Mortgage Modification (to reduce your monthly mortgage payment for a while)
State and Federal Relief (not available to all)

2. Chapter 7 Bankruptcy

This is generally the “preferred” bankruptcy (and account for approximately 65% of US bankruptcies), as it generally releases you fully from all your obligations other than ones you wish to keep, say for your house or for your vehicle.

You need to meet certain requirements to qualify for a Chapter 7, which are listed below.

3. Chapter 13 Bankruptcy

Chapter 13 bankruptcies were created to help people pay back their obligations over time, and sometimes at a lower amount. Your debts are restructured, you have up to 5 years to pay them off, and the court supervises the program. After your obligations are paid off, your bankruptcy is discharged, and you can start your life free and clear.

Who Can File For U.S. Bankruptcy?

You must live, have a residence, property, or place of business in the U.S.
You must pass a “Means Test” to file Chapter 7 If eligible for a Chapter 7, you must take a credit counseling course
For Chapter 7, you can not have been granted a discharge under Chapter 7 or completed a Chapter 13 payback plan within the last 6 years
You can not have had a bankruptcy filing dismissed within the last 6 months
For Chapter 13, you must have regular income, have less than $250,000 in unsecured debt (like your credit card debt), and less than $750,000 in secured debt (like your home mortgage)

file bankruptcy yourself

New Bankruptcy Rules in Cambridge
If you go bankrupt, my job is to ensure that you make the required payments, fulfill your other duties, or if a creditor attempts to garnishee your wages or harass you.

Dealing with Personal Bankruptcy
In today’s economy a lot of people are struggling to make ends meet, and more & more people are thinking about the option of declaring personal bankruptcy.

Federal Bankruptcy Law: Important Information
Just make sure that you look at the correct type of bankruptcy law, so if you are dealing with a business you will need to become educated specifically on business bankruptcy law.

Personal Credit Crises and The Road to Bankruptcy | Newswire
The Monday after Edmund Andrews published a much emailed and discussed piece in the NYTimes magazine about his “Personal Credit Crisis” and sub-prime mortgage lending, I drove by his house.

Facts You Must Know To Avoid Filing Bankruptcy
If a business files bankruptcy the personal situation of a director is not impacted, nor are any of there assets unless the company has debts where the director has personal liability.

Chapter 7 & Chapter 13 Bankruptcy Options