Bankruptcy credit repair...if you are considering it, then knowledge of what is involved will help you not only decide if it's your right decision but how to get a jump on the credit repair needed afterward.
When contemplating bankruptcy there's much to consider and much said about it.There are those that act like it's a sentence of death that will curse you till the day you die. That's a little extreme!
They speak as though bankruptcy and credit repair are not possible.
What I've found is the ones against it have something else to sell you.
Those for it are usually lawyers who of course want you as a client.
Maybe that's not enough said for you in your consideration toward bankruptcy credit repair?
Do you think you will be standing in a court room with humiliation?
Most of bankruptcy proceedings are strictly administrative. That means paperwork only. The only formal public meeting you will likely attend would be called the 341 meeting named after the law code that requires your presence there.
At that meeting only a few officials would attend and usually the only others attendees are also filing for bankruptcy.That meeting is an education of it's own if many other filers attend!
It is rare for creditors to bother showing up for that meeting.
Think you will never be able to get a mortgage again or in no time soon?
Is two years too long for you?
Do you think it will affect getting a job? Well unless you have plans to work as a financial planner or something in the way of selling securities or any financial based job you can not be discriminated on the fact that you filed bankruptcy.
When one is considering bankruptcy credit repair it is best to know as many of the facts as possible.
Bankruptcy is a Federal law but many times State law may have some bearing (usually on what is exempt).
In the original words of that law it says "The goal of the Bankruptcy Law is to give the honest debtor a financial fresh start from burdensome debts."
Do notice that it says honest debtor. There are reported cases of Bankruptcy abuse whereby persons have tried to use the law to their benefit.
The laws and the cases are now being monitored by the U.S Trustees Program part of the Dept. of Justice and they do have a bankruptcy fraud program.
What usually happens in bankruptcy is the debtor is looking for a discharge from debts.
Not all debts can be discharged but many can be.
A discharge is the legal and lawful release from the debts listed in the bankruptcy filing.
Are you a honest person that doesn't feel quite right leaving a company high and dry on money you borrowed in good faith? Well I commend you for that there aren't many of you left.
BUT if you've been dealing with credit card companies for very long I'm sure you have been wronged.
If you've had a balance on an account for a long period of time you have probably paid that debt long ago.
Before the credit card act went into place there have been some definite former maneuverings that went on to trump up their profits.
One card (I won't mention the name) always seemed to be doing site maintenance 5-7 days before the due date time.
And of course the payment processing time took 2-3 days so that by the time they were done with the maintenance the payment would be late. On the other hand if you decided to make payment by the way of a phone call THAT had an added charge attached.
Maybe you have a story of your own there!!
Thankfully the Credit Card Act has put a damper on these kinds of behaviors.
For some, bankruptcy is the equivalent of a huge weight being lifted off their back.
And a great dose of stress relief to go along with that!!
If you are one of those whose employment has been adversely affected by the current economy you may be a well suited individual for this course of action.
Types of Bankruptcy
There are many types of bankruptcy, but the one most typically thought of as true bankruptcy and probably most sought after is the the chapter 7 or Liquidation (liquidation of assets).
In this chapter of bankruptcy
many times there are no assets to liquidate as many are exempt and the
individual has exhausted all their resources. Their income usually proves to
be inadequate to cover their debts. In this bankruptcy most debts are
Another type is the chapter 13 bankruptcy which is also called reorganization or entitled adjustment of debt. This is for those who still have their regular income but just need an extended payment plan to get a hold on their situation.
Some debt can be discharged and some is just reduced.
Another type of bankruptcy is called chapter 12 which is the same as chapter 13 but designed for fishermen and farmers.
The Means Test and Presumption of Abuse
The first thing one must do in bankruptcy credit repair (besides finding a competent attorney) is take a Means test.
This is part of the newer ruling of bankruptcy. It determines in which type of bankruptcy you qualify.
For Chapter 7 it is called a form 22a; chapter 13 form 22c.This is a statement of current monthly income and expenses.
The first part of the means test determines rather quickly if you qualify for a chapter 7 or must go on to a chapter 13. It uses tables from the IRS and the census bureau to help qualify you.
One of the pieces of information it uses is the average median family income for your family size.
If you do not pass that section, there is a further rather intense list of allowable national and local standardized allowable living expenses that are compared to your income.
The U.S. Trustee program is the entity in charge of supervising bankruptcy and for that reason and the reason of dealing with the Means Test I say you should consult and use an attorney.
If you are in the situation of needing a bankruptcy you don't need any further stresses than what you are already dealing with.
Usually the initial consultation is free.
Then again if you are cool as a cucumber and like a challenge you can give Pro Se Bankruptcy a try on your own.
If you can do a bankruptcy on your own then the bankruptcy credit repair scenario should be a snap also.
This does not make it a free venture. There is usually a filing fee of about $245.00 and then an administrative fee and a trustee surcharge with the chapter 7.
These are included in your cost with an attorney.
Then there are the mandatory credit counseling and debt education courses. They also are usually included with the attorney charges.
These cannot be done by just any company.
They must be certified for the bankruptcy procedure by the U.S. Trustees
As one can see there is much to consider in bankruptcy.
This does not have to be a difficult situation but should be considered carefully before proceeding. Another area to consider along with the bankruptcy is the credit repair afterward .
A useful resource when one is considering bankruptcy credit repair is the experience of others. If you have been through a chapter 7 bankruptcy please TELL YOUR STORY!! We all can use the help.
Of course we also want to share and read about Chapter 13 Personal Bankruptcy Stories
Possible foreclosure problems
If foreclosure is also a big concern for you along with possible bankruptcy please take a look at this site...
a visit to your state's Attorney General Home Page is a must do resources for information needed to guide you through that difficult process.
What bankruptcy credit
repair will do for you if you have a heavy debt load that you can't
manage is to clear the slate, make that debt either disappear or become
much more manageable. This will give you the chance to add much needed
good credit to your report that in many cases has been showing late
payments or closed accounts.
Remember that the rule of thumb with creditors is that they usually look for the last two years of credit history to be the current judge of how you handle your debt. Bankruptcy credit repair can change the picture when the debt is overwhelming!!