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Personal Bankruptcy - Not As Easy As It Sounds


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Personal bankruptcy is something that many people start to consider when they discover that they are drowning in debt. It is not a decision that most people make lightly and some are even embarrassed about the possible necessity of taking such a drastic step, even though the records show that the majority of people who file do not do so due to financial mismanagement, but due to things outside of their control such as divorce, unexpected medical expenses, job loss, etc.

One of the things you need to determine for personal bankruptcy is whether Chapter 7 or Chapter 13 is better for you in your situation. The laws and requirements of these are significantly different, and depend on a large variety of factors that are particular to your situation.

Many people think that filing personal bankruptcy is just a matter of filling out the right forms and submitting them, but the days when that statement was true are long past. With the recent changes in bankruptcy law, this is no longer a do-it-yourself process, and you may wish to consider getting a good lawyer that can guide you through the maze of forms and paperwork. The money spent on a bankruptcy lawyer can more than pay for itself in time saved and assets not liquidated.

You need to know what kind of debt you have that is causing you to consider a step as drastic as this because there are certain kinds of debt that cannot be discharged with any type or chapter of bankruptcy. Some of these would include federally funded student loans, alimony, and other type of debt, so if these types of debt make up a good percentage of your total indebtedness, this is not going to help you.

Personal bankruptcy is neither quick nor simple. While it can wipe your financial slate clean so you can start over, the entire process will take several months to accomplish, and this does not matter which chapter you are filing. You should also be aware that a court judge will review your case and approve your bankruptcy so you can move forward with it, but there is a chance that from a legal standpoint, you may not even be able to file.

Strange as it may seem, the new bankruptcy laws dictate that you must attend some credit counseling sessions. This is strange because the majority of people who file do not do so due to financial mismanagement, but this is still part of the law, so it is something that you need to plan to do.

This is not something you want to enter into until you have considered all of your other options. The reason for this is because a bankruptcy filing will show up as a huge flag on your credit report for the next seven to ten years, and it will be more difficult for you to get credit cards, personal loans, a mortgage, and even employment with that huge blemish on your credit report.

Having financial obligations is almost a way of life in today's world. While we cannot accurately forecast what will happen in the future, there are usually options that should be evaluated, and in the financial world, bankruptcy may indeed be the best option. But you need to be aware of the ramifications and ensure that you have checked into all other possible options first.

For more insights and additional information about Personal Bankruptcy as well as getting a free bankruptcy evaluation from a qualified attorney local to you, please visit our web site at


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