What Happens Once You Have Filed For Bankruptcy?


Filing for bankruptcy does not automatically put you under the category of losers. This is not true, for most people find that after a dramatic change in their life, which may be losing a job, a grave illness or a divorce, they simply can no longer meet up to payments. This is quite understandable, for it is already difficult to cope with monthly payments in normal conditions; it is therefore more so when faced with major difficulties.

Although you may wish to pay back certain creditors, for this is important to you, you are under no obligation to do so. You may pay off any debts once your debt has been discharged, that is entirely up to you. No bankruptcy code will prevent you from choosing to do so once you are back in sound condition. However, once you have filed for bankruptcy all your creditors must be listed and any erased debts will include all or most of these.

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Your credit rating will actually improve once you have filed for bankruptcy, for all your debts will be erased. However, the fact that you have filed for bankruptcy will remain on your report for the next ten years, which is not good for your credit report either.

In general, you will not be able to avoid paying your back taxes with bankruptcy, although there are certain procedures that may allow you to do this. One way to do so is to file all your returns and all taxes you owe must be more than three years old.

Strictly speaking bankruptcy can be filed only once in a lifetime, although this is not exactly true. If you file for bankruptcy with Chapter 7, you can do so again after six years. Filing under Chapter 13, will allow you to file again more often than in Chapter 7, although you cannot have more than one case opened simultaneously.

Although filing more than once is possible, it is however not a good strategy, for it should not become a habit or way of life. This is bad for both your credit rating and your future plans.

It is a big mistake to think you can get away with paying off all the expenses you made with your credit card by filing for bankruptcy. The judge may consider this as an attempt to fraud your creditors. The trustee who will be following your filing, knows what to look for while reviewing your bankruptcy and will denounce all signs of fraud to the judge, so it is not a good idea to do so.

Filing for bankruptcy is no simple affair; this is why it is a good idea to refer to a bankruptcy attorney, who will be aware of the best procedures to follow, in order to make the bankruptcy filing as profitable as possible to your case.


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