Bankruptcy: the word alone may send chills up your spine. But so should the words “debt”, “foreclosure”, and “repossession”. While bankruptcy may seem undesirable, intimidating, or downright embarrassing, in some instances bankruptcy can be a useful tool and may save you from a life mired in debt. Bankruptcy under chapters 7, 11, and 13 are available to both individuals and businesses, each with its own advantages and disadvantages.

Chapter 7

Chapter 7 is a liquidation bankruptcy. This means that, as an individual or business, when you file for Chapter 7 you agree to have some of your property liquidated to pay off your debts. Businesses that file for Chapter 7 will be dissolved and the assets liquidated to creditors. For individuals, some assets may be exempt, such as your home, tools of your trade, and retirement accounts. The laws for exempt assets vary from state to state. All nonexempt items, however, are at risk of being liquidated under Chapter 7. While you may lose a significant amount of property, your debts will be immediately resolved and you can quickly begin to restructure your finances without the burden of debt.

Chapter 13

Chapter 13 is known as the wage earner’s plan because it is typically implemented by individuals with a regular wage or income. In fact, to qualify for Chapter 13, an individual must have a regular, reliable source of income that they can use to pay back their debts. If a person is eligible for Chapter 13, he or she will draft a debt repayment plan. The plan will specify how often the debtor will make payments (usually bimonthly or monthly) and how much the debtor can afford to set aside for each payment. This will determine how quickly a debtor can pay back creditors. In most cases the plan is expected to be completed within 3 to 5 years. If you can afford it, this is a good option because you will not have to give up your property for payment.

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- Do your research. This will allow you to be proactive and informed.

- Be sure you include all eligible debt.

- Some debts cannot be discharged and those include tax bills and student loans. Yet, in a lot of cases, they’ll work with you.

- After you file, an “automatic stay” is put into place and now your creditors aren’t allowed to try and collect or contact you. When they do, they’re breaking the law, so contact your lawyer.

- Your bankruptcy will remain on your credit for ten years but you still can re-establish some credit. There are a lot of companies that specialize in re-establishing your credit. Their fees could be higher, yet over time, this will really help, if you’re responsible with the credit.

- Your landlord and employer won’t be informed of the bankruptcy, unless they’re one of your creditors. But remember, this is an issue of public record, is someone is curious they can find out if you filed or not.These are some bankruptcy facts that are overlooked.

- For a year, at least, keep all the bankruptcy records and all the back-up documentation.

- Be sure you and your attorney have a good compatibility with each other and that you’re comfortable.

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It is now estimated that the current unemployment rate is a record high of 9.5%. Plus expected to rise even higher in the coming months. This will mean that hundreds of thousands of people will be without a job and therefore without earnings. Yes, those people who recently lost their jobs will receive unemployment benefits. However, it usually is not enough to cover the mortgage and therefore qualify for a loan modification or a Chapter 13 Bankruptcy to stop foreclosure. So what does this mean for you if you are behind on your note? The most common options that are in place to assist homeowners in default and keep them from being foreclosed on require proof of the ability to pay on their notes. What if you are one of those people who primary wages comes from a job and you recently lost your job? This means you most likely would not qualify for any assistance from the help options most widely talked about.

Foreclosure Default Options:

HAMP is a government program that stands for (Home Affordable Mortgage Program). It was introduced to entice banks to offer loan modifications by offering tax guarantees in case the loans should go back into default.
A chapter 13 Bankruptcy is basically a structured repayment plan that is authorized by the U.S. Federal Bankruptcy Court where the courts determine a monthly payment to pay down your debt.

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When your home is sold at a foreclosure auction, it may not sell for what it is worth or, more importantly, what you owe on it. If your home sells for less than your debt to the mortgage company, you will still be held responsible for the balance and your creditors can still come after you. For example, if a man owes $120,000 on his mortgage and his home is only auctioned for $100,000, he still owes his mortgage company $20,000.

The remaining balance is called a deficiency balance and it can really get people into trouble. Not only will you have lost your home but you will also have to continue to pay for it. The creditor can and will file suit, obtain a judgment and can levy your bank accounts or garnish your paycheck.

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Experiencing foreclosure is not only stressing, but it can have effects on your credit history and scores, thus, affect not only your present finance but your future as well. Although many people do not make attempts to avoid this, it is important that you know that there are ways in which foreclosure can be prevented.

First, it is important that you are aware and well informed of your payment dates. Whenever you are about to miss a date because of financial problems, face this and contact your lender. It is easier to try to fix things before the foreclosure process starts. Your lender might even help you avoid foreclosure, for own benefit. Remember, they want their money.

Secondly, whenever trying to avoid foreclosure, you should be aware of important dates, including your payment due date and the foreclosure beginning date. Maybe marking your dates on a calendar will help you remember better. This works in a simple way.

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Are you looking for a way to figure out if you can afford to file bankruptcy because you know that there is no other way out of your financial hell that you are living in? Do you want to know what the cost to file bankruptcy is going to be and do you want to get through this situation without any struggles? You are probably making the right decision and in the long run you will be happy you decided to take this road. Here are some helpful tips.

First, the amount you pay for your bankruptcy does depend on whether or not you do it yourself or hire a lawyer. Then, it all depends on how much you spend on a laywer. This can range from a few hundred dollars to a few thousand or more for the lawyer or lawyers you are going to need to file your papers with the bankruptcy court. This could, however, be the best decision you ever made and a fresh start might just be what you need for your life.

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Some people fail to see the signs of an impending foreclosure. That is the reason why many of them have to face this kind of problem. Foreclosures are inevitable when you begin to have difficulties in paying your mortgage. Considering the expensive purchase you made (that is your house), any troubles that could affect you financially can lead you to foreclosure in just a blink of an eye. The problem is this process is not a pleasant experience. It involves court hearings, being served with eviction notices and finding new homes. It is understandable why people want to avoid it, even the lenders. The whole process is just stressful, embarrassing and heartbreaking.

Foreclosures are serious cases. People incur great losses from it, including your equity. If you are on the verge of foreclosure, you have to find a way to stop it. Therefore, when it happens, you have to be ready. Doing this may require you to learn more about the process and how it works. Knowing foreclosure may also give you opportunities to save your home. Not only that: it will lessen your anxiety and makes you think of better options.

When you undergo foreclosure, you may seek advices from friends and family. If they are not finance experts, do not believe everything they say. Even if they have undergone foreclosure, you have to understand that their experience can be different from yours. Do believe that it does vary. If it was difficult for them, it may not be difficult for you. In fact, you may have greater chances to save your house.

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The property and financial markets today offer a lot of options to consumers, but often we are unable to make the most appropriate choice. Unfortunately many people lose their homes due to foreclosures as they have found themselves in a bad financial situation either due to losing their job, due to illness or some other serious reason. On the other hand, this grave problem for some is an opportunity for others. Home buyers can take advantage of the situation and make a beneficial real estate deal. There are some concerns whether it is moral to use the misfortune of other in this way, but the reality is that in the majority of cases these people will lose their homes no matter whether you buy the property or not. Here is a brief explanation on how foreclosures work to help you decide if this type of deal is for you and how you can go through with it.

A foreclosure of a property occurs when the homeowner is unable to cover their mortgage payments. In this case the lender has the right to gain full ownership of the property. This is the simplest answer to the question of how foreclosures work. The legislative procedure varies from state to state, which determines the time period and the special circumstances of the process. Usually the homeowner will have the chance to clear their debt within a redemption period, which is differs in length as well. In some places the lender cannot evict the homeowner from the property and get hold of it without a judicial decision. The whole process can take a long time even around a year during which the court hearings are taking place.

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A sad fact of life is that increasing numbers of people are finding themselves in a position, either though unfortunately circumstances or financial mismanagement, in a position where they are simply unable to pay back outstanding debts. Under these circumstances they may consider bankruptcy, yet the stigma attached to this viable means of resolving financial issues, coupled with its long term consequences, mean that many people will do anything they can to avoid bankruptcy.

This occasionally comes at the expense of people selling assets that would actually be protected under chapter 7 bankruptcy. One such method people use to avoid bankruptcy is using their pension or retirement plan to pay off unsecured debts, thus avoid bankruptcy. Often, the desire to avoid bankruptcy comes from peer, social or family pressure, as well as potentially bad advice from financial counsellors.

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There could anything that would push a person to file bankruptcy, but everyone knows what a blotch it makes up on your credit history for at least seven years to come. These circumstances could be anything, loss of a job, unforeseen medical issues or of course going through a divorce. What ever the case is, you should know the primary information on filing bankruptcy that you can use to make sure that your bankruptcy filing process is not a terrible one, and you could get all the help in the world.

If you don’t want to go through the continued harassment from your creditors, you should bear in mind that you could always file for bankruptcy. You would be happy to get rid of all the tension in your life concerning finances, you would be happy not to be in debt anymore. Although most recommend bankruptcy to be the last resort in your financial troubles, you should understand that in some cases it is absolutely necessary because you just wouldn’t have any other way out, not even debt consolidation would help you.

There is a myth connected to bankruptcy, that as soon as you file for it, you would have a terrible credit score to deal with the rest of your life. This is not entirely true, because your credit score will get better as soon as you start making on time payments of your bills even right after the bankruptcy case. At most, your credit history and score will be clear of the bankruptcy blotch with in 10 years.

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