Reasons To Consolidate

Stop Collection Calls
Lower Monthly Bills
Free Credit Counselors
Repair Your Credit
Get Out of Debt For Good
Foreclosure Facts
Loan Modification
Debt Elimination
Debt Settlement
Debt Negotiation
Personal Debt Freedom
Debt Management Plans
Debt Consolidation Guide
5 Steps To Debt Relief
Types of Debt Relief
Tips To Reduce Debt
Understanding Tax Debt
Payday Loan Relief
Debt Negotiation Letter
Debt Verification Letter
Credit Card Help
Credit Card Rules Changes
Store Credit Cards
Fix Credit Card Debt
Debt Consolidation Loans
How Debt Consolidation Affects Credit
Free Bill Consolidation?
Reduce Your Debt
The Debt Snowball
Financial Planners
Medical Debt Guide
Seniors in Debt
How to Keep Your Job
What if You Don't Pay Bills
Wage Garnishment
Mortgage Hardship Letter
Get Out of Debt
Bad Credit Personal Loan
Life After Bankruptcy

Filing for Bankruptcy

If you are considering filing, or already have filed, for Chapter 7 or Chapter 13 Bankruptcy, you should thoroughly understand the requirements, procedures and activities involved. A few basic similarities are as follows:

Before Filing:

  • life after bankruptcyYou need to find an attorney who specializes in bankruptcy.
  • The law requires you to attend a credit counseling program prior to being approved to file for bankruptcy.
  • You must detail all existing debts, along with name of account, address and amount owed.
  • Most types of debts are included – e.g., secured and non-secured debts.

After Filing:

  • An “automatic stay” prohibits (most) further collection efforts against you.
  • You will be held responsible for any credit you accrue during the bankruptcy procedures.
  • The law requires you to complete a debt management program prior to completing the bankruptcy process.
  • Bankruptcy can stay on your credit report for up to ten years.

Although, there are similarities, there are definitely some distinctions. You’ll want to be well-informed of all aspects of the bankruptcy filing you decide to use.

Chapter 7 or 13 Bankruptcy? – Advantages/Disadvantages

Chapter 7 Bankruptcy: The advantages of using Chapter 7 Bankruptcy are that all of your debts, save a few, are completely discharged when the bankruptcy is finalized, and the entire process typically takes only three to six months to open and close. The only debts that remain are mortgage, car payments, student loans, unpaid child support, taxes and maybe medical bills. Of course, you’ll be responsible for any debts you accrued while you were in bankruptcy.

life after bankruptcy

One of the disadvantages of Chapter 7 filing is that prior to being approved to file, you are scrutinized for a “means” test. You must pass a “means” test, which means your income must be less than the median income for your state in order to file for Chapter 7 Bankruptcy. You also could lose property in the bankruptcy, although, most filers don’t.  Another disadvantage is that credit reporting agencies keep a Chapter 7 Bankruptcy on your credit report for ten years.

Video: Is Chapter 7 Bankruptcy Right for You?

Chapter 13 Bankruptcy : Some of the advantages of a Chapter 13 Bankruptcy are that it allows you to stop foreclosure proceedings, and may even enable you to catch up past due mortgage payments over time, but you must pay all your mortgage payments on time after filing and during the bankruptcy.  It allows you to pay your secured debts off over time, and could even lower your payments, since the minimum time allowed to pay off your debts is typically thirty-six months.  Your total amount of unsecured debt is drastically reduced, up to 90%. In addition, a Chapter 13 Bankruptcy is often removed from your credit report within seven years, instead of the ten years allowed by law. 

Some of the disadvantages of this filing are that, in addition to the monthly repayment schedule for debts, you are required to pay a maintenance fee to the court; it takes a longer time to repair your credit; and many who use this filing fail to follow through, which results in their case being dismissed by the court.  Once a case is dismissed, many end up losing their homes, anyway, since you cannot refile for bankruptcy for 180 days.

Video: Understanding the Differences Between Chapter 7 & Chapter 13 Bankruptcy

Your Bankruptcy is Finalized:  Now What?

You can now breathe a long sigh of relief.  Your bankruptcy has been finalized and you are ready to get on with your life.  There are some common pitfalls and stumbling blocks you’ll want to avoid on your road to financial recovery, and some future goals for rebuilding your assets that you may want to consider.

Pay your bills on time.  Don’t get behind.  One month could lead to another, and another, and you’d be back in the same situation you started from.

Don’t accrue any new credit.  Stay away from credit cards if at all possible. Paying with cash is the best policy. You may, however, require a credit card for business travel, and that is possible after bankruptcy. Also, you may want a credit card for emergencies ONLY. In either case, you could be approved for a secured credit card, and sometimes even a non-secured credit card. You’ll want to do your research, though.  Many of these companies charge astounding interest rates, application fees and maintenance fees.  Compare several companies’ fees before applying.  Keep in mind, you’ll only want to submit your application to one or two credit card companies, because applying for several will negatively impact your credit report.

If you think you may need to purchase another car, but you’ll need to get a loan to pay for it, make sure you’re setting aside at least 10%, if not 20% or more, of your paycheck into a savings account for the down payment. Your interest rate will likely be high. If you make your payments on time, though, you should be able to buy a newer car in six to twelve months with a lower interest rate.

In regards to applying for a mortgage, you typically have to wait two years after a bankruptcy has been finalized to be considered for a new mortgage loan. You’ll want to check with your local lender for their practices.

Although, you’ve gained a good understanding about personal bankruptcy from this article, the U.S. government provides detailed information and specifics regarding bankruptcy laws.  If you or anyone else you know needs debt-consolidation information, the following attorneys from eight major U.S. cities are available to assist:

Isaac M. Gabriel
Two North Central Ave.
Phoenix, AZ  85004
(602) 230-4622

Bayer, Wishman & Leotta
888 S. Figueroa St., Suite 1970
Los Angeles, CA  90017
310) 899-0630 or (800) 307-3328 (toll-free)

Limbocker Law Firm, LLC
2470 Windy Hill Rd., Suite 300
Marietta, GA  30067
 (770) 933-5355

David M. Siegel
19 S. LaSalle St., Suite 707
Chicago, IL  60603
(773) 276-6969

Ravich, Meyer, Kirkman, McGrath, Nauman & Tansey
80 S. Eighth St.
Minneapolis, MN  55402
(612) 332-8511

Doug Breyfogle
4505 Madison
Kansas City, MO 64111
(816) 751-0595

Gary J. Gaertner
420 Fort Duquesne Boulevard
Pittsburgh, PA  15222
(412) 281-7650

Higgins & Associates
112 Goliad St.
Fort Worth, TX  76126
(817) 924-9000 or (800) 876-0495

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