Filing for bankruptcy: Some things to keep in mind
September 23, 2009
I’ve seen many, many advertisements on television and the internet lately regarding filing for bankruptcy. Most of the ads tend to overstate or understate the difficulty and possible drawbacks regarding filing for bankruptcy.
One ad I recently saw made bankruptcy sound like a walk in the park, like someone waves a magic wand and all of your troubles are over.
Bankruptcy is certainly not an easy option. It’s not the best option for everyone. (Remember that it will stay on your credit report for up to 10 years and make getting new credit very difficult.) However, there are some people who truly don’t have a better option. And, though it’s difficult, you can rebuild your credit over time.
The bankruptcy laws now require anyone considering filing for bankruptcy to attend what is called a “pre-filing bankruptcy counseling session.” This session is actually very beneficial. A certified counselor reviews your financial situation and gives you the information you need to decide if bankruptcy is really your best option. The counselor may be able to give you other options.
The important thing is to make sure to understand all of your options and not take any decision lightly. And please be very careful when working with any kind of a debt relief company. Make sure you work with a non-profit agency that is affiliated with the National Foundation for Credit Counseling and has a good record with the Better Business Bureau.
Considering bankruptcy?
July 9, 2008
Sometimes a financial situation has become so dire that there are limited options to improve one’s situation.
If you have found yourself in that situation, you may be wondering if you can claim bankruptcy.
There are a few things you should know if you are considering filing for bankruptcy.
First, the Bankruptcy Reform Act of 2005 has set forth some requirements for those who do file for bankruptcy.
One very important requirement is that you must complete a pre-filing credit counseling session before actually filing for bankruptcy. If you file without completing the mandatory counseling session, your case will be dismissed, and your attempt to file will still be noted on your credit report.
At Advantage, we recommend you contact your local Bar Association and hire an attorney if you are planning to file for bankruptcy. While you can file on your own, it’s a complicated process. But, understand that if you hire a lawyer, there will be attorney fees on top of the bankruptcy filing fees.
Individuals can file for Chapter 7 bankruptcy — which means most of your debts are erased — or you can file for Chapter 13 — which means your debts will be restructured and you’re given a payment plan. Only some filers will qualify for Chapter 7. It all depends on each individual’s financial situation.
After you file there is a legal process that will take place that involves a court appearance. An attorney can explain all of the details.
One other part of the process is to complete an education class within 45 days of your court appearance. Your bankruptcy will not be discharged until you complete the class and send a copy of your completion certificate to your attorney.
For more information, check out this Bankrate.com article, or to talk to a credit counselor about your financial situation and to see if you have other options besides bankruptcy, call Advantage CCS at (888) 511-2227 or visit our web page at www.advantageccs.org.
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