Avoid Bankruptcy

Are you considering filing for bankruptcy and looking for answers to bankruptcy questions? Debt Regret offers a free, no obligation, bankruptcy alternative consultation that can help answer your questions prior to making the decision to file for bankruptcy.

Quite often, we can help you find a way to reduce your unsecured debt without having to file for bankruptcy at all. Debt Regret has developed a proven system to help assist people in need of debt management services. Debt reduction and debt consolidation may seem like the only way to achieve debt relief; however, debt settlement is considered by many to be the most effective and least expensive form of debt relief outside of bankruptcy.

Note: This should not be considered legal advice. Debt Regret does not provide legal or tax related advice. If you need any type of legal or tax related advice, you must contact a licensed attorney in your state or a qualified accountant.

What is Bankruptcy?

Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. However, it is important to realize that certain forms of debt, such as student loans, are not forgiven through the bankruptcy process. Bankruptcy can have a devastating impact to your credit report and credit score. Bankruptcy will often remain on your credit report for as long as 10 years. During this time it can be next to impossible to obtain loans or any type of credit. If you are able to find a lender that is willing to do business with you, you will pay the highest possible interest rates allowed by law. Quite often, lawyers are quick to suggest bankruptcy but, they don't always explain how damaging bankruptcy can be. Why would a lawyer do this? The answer is simple; if you don’t file for bankruptcy, they don't get paid. The best thing that you can do is obtain independent information if you are considering bankruptcy. This way you become informed in an unbiased manner.

Facts about Bankruptcy

Many people do not realize that there are five types of bankruptcy options available under the U.S. Bankruptcy Code; however, for most consumers there are really only two viable options; Chapter 7 and Chapter 13 bankruptcy.

Chapter 7, bankruptcy is entitled Liquidation: In a Chapter 7 bankruptcy, a court-supervised procedure occurs during which a court-appointed trustee collects the assets of the debtor’s estate, converts them to cash for repayment, and makes all necessary distributions to the debtor's creditors; however this is all done within the debtor’s right to retain certain exempt property. Traditionally, there is little or no nonexempt property in a chapter 7 bankruptcy. Due to this fact, there may not be an actual liquidation of the debtor’s assets. In this case, it is called a “no-asset bankruptcy.” It is important to realize that a creditor that is trying to collect on an unsecured claim will only get a distribution from the bankruptcy estate if the case is an "asset bankruptcy" and the creditor can provide proof of their claim with the bankruptcy court. In almost all chapter 7 bankruptcies, the debtor will be grated a discharge that releases them of personal liability for most dischargeable debts. The entire process normally takes just a few months from the time the bankruptcy petition is filed.

Chapter 13, bankruptcy is entitled Adjustment of Debts of an Individual with Regular Income: A chapter 13 bankruptcy is traditionally used for people who have a regular source of income or a full-time job. For many people, chapter 13 is preferable to chapter 7 because it allows the debtor to keep some assets. A chapter 13 bankruptcy allows the debtor to repay creditors over time. This time traditionally varies from three to five years. This type of repayment proposal takes place at a confirmation hearing.  During this confirmation hearing, the court will either approve or disapprove the debtor's repayment plan. This decision largely depends on whether the repayment plan meets the Bankruptcy Code’s requirements for confirmation. In a Chapter 13 bankruptcy the debtor is usually able to remain in control of their possession and property while making payments to creditors; however, payments are made via a court trustee. Unlike chapter 7 bankruptcy, the debtor does not receive an immediate discharge of their debts. Under chapter 13 bankruptcy, the debtor must complete the repayment plan before the discharge is granted; however, the debtor is protected from lawsuits, garnishments, and other creditor action while the plan is in effect.

It is important to remain cognizant of the fact that not all debts are discharged under bankruptcy. The debts that are able to be discharged will vary under each chapter of the Bankruptcy Code. However, the most common types of non-dischargeable debts are tax claims, debts that are not presented by the debtor to the court while filing for bankruptcy, debts for spousal or child support or alimony, debts to governmental units for fines and penalties owed to government entities, debts for personal injury caused by the debtor’s operation of a motor vehicle while driving intoxicated, debts for willful and malicious injuries to person or property, debts for government funded or guaranteed educational loans, and debts for certain condominium or cooperative housing fees.

In order to file for bankruptcy, you must file a petition in federal bankruptcy court. You must file a statement of assets and liabilities as well as schedules listing of your creditors. Once you have finished filing bankruptcy, your creditors can no longer take  action against you to collect discharged debts.

Negative Aspects of Bankruptcy

In chapter 13 bankruptcies, you may end up paying back 50% or more of your current debts. Additionally, if you miss a regularly scheduled payment at anytime during your chapter 13 bankruptcy repayment plan, you could end up in violation of the court and forced to repay all the debt!

One of the most difficult parts of bankruptcy is learning to live with the fact that filing bankruptcy limits your personal spending to items that the court considers absolutely necessary. In most cases, debtors do not complete their chapter 13 bankruptcy repayment plans. Most people filing chapter 13 bankruptcies think they will be able to complete their repayment plan; however, only about a third of them actually do. Additionally, chapter 7 bankruptcy may stay on your credit longer than a chapter 13 bankruptcy. This time ranges from 7-10 years for most people. Many people do not realize that if you own a home with a sizable amount of equity, have a fair amount of assets to protect, or have co-signers on a loan, you most likely will not be able to file chapter 7 bankruptcy under current law. Now that the new bankruptcy legislation has passed, it will be even more difficult to file for bankruptcy.

Many people think that filing bankruptcy is the silver bullet that will fix all of their debt and credit related problems; however, filing bankruptcy is the worst thing you can do to your credit. Most lending institutions will consider your bankruptcy when evaluating you for a personal loan even after the bankruptcy has expired. Qualifying for a loan after filing for bankruptcy can be very difficult and could cost you considerably more than a person that has not filed for bankruptcy. It is understood that some situations will require you to file for bankruptcy. However, you should avoid bankruptcy if at all possible. Debt Regret can help reduce most, if not all, of your unsecured debt so that you do not have to file for bankruptcy. If you require additional information on the subject of bankruptcy you may want to contact a bankruptcy attorney in your area.

Bankruptcy Can Be Avoided

Hundreds of thousands of people needlessly file bankruptcy each year. Debt Regret has developed a program that can reduce your current debt in the shortest time possible and without having to file for bankruptcy. While bankruptcy may seem like the best solution to your problems, in many cases, it's not.

Debt settlement is fast becoming the only viable alternative to bankruptcy. One of our Debt Specialist can consult with you about your bankruptcy related problems and provide guidance when possible. In order to expedite the process, you can either fill out our free consultation form, located at the top of the page, or call us Toll Free at 888-902-3328.

Debt Regret, and its debt settlement program, have been the obvious choice for many people. Why not make the right choice now and contact Debt Regret.

 

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