Bankruptcy should always be treated as the absolute last resort for anyone in who is facing a large amount of debt. While the appeal of having large amount of debt absolved and being given the opportunity for financial rebirth are large, it’s an absolute necessity to remember that filing any type of bankruptcy can have disastrous effects upon your credit report and score.

While this fact is widely known by the public, most do not know which chapter of bankruptcy makes a bigger mark on your financial history. For most consumers, there are two chapters that can be filed; chapter 7 or chapter 13. This simple comparison will tell you the differences in severity between the two chapters’ effects on your credit score and report.

Chapter 7 Bankruptcy

Filing chapter 7 bankruptcy will have a much worse and longer-lasting effect on your credit score than any other type. Chapter 7 bankruptcy can sink your credit score to a point so low that it will be at least two years of perfect credit maintenance before opening new lines of credit or obtaining loans stops being extremely difficult.

It’s no secret that filing chapter 7 will drastically reduce your credit score, but what many credit users are not aware of is that filing chapter 7 bankruptcy will stay on their credit report for ten years. That means for the next decade, any creditor or lender can refuse to offer you credit or loans purely based on the fact that you have filed bankruptcy in the past.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, while still detrimental to your credit score and report, is considerably less harmful than chapter 7. This is primarily because chapter 7 bankruptcy is designed to erase everything that a debtor owes, while chapter 13 bankruptcy creates a payment plan for debtors to pay back what they owe over an extended period of time.

If you have the means to make regular payments, chapter 13 can often achieve similar results to chapter 7, but with a lot less damage to your credit report. This doesn’t mean that chapter 13 leaves your credit score unscathed. Getting your score back up to a respectable level after filing chapter 13 can often take just as long as recovering from chapter 7.

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Originally posted 2010-01-03 13:03:28. Republished by Blog Post Promoter

Bankruptcy: What Choices Do I have? is a post from: IRS Tax Problems?

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• Should You File for Bankruptcy? If you are deeply in debt to creditors and have exhausted all possible methods to repay your debts, your last, and maybe, only resort may be to go into bankruptcy. Bankruptcy allows you to legally not pay your debts. There are many reasons you may have to go into bankruptcy.......

Chapter 7 Bankruptcy: What is it? How does it work? How much does it cost? These and other questions are being asked by more and more consumers as they continue to be dragged down and bogged down by the weak economy. "Technically", the great recession has ended. This is according to the results of a poll taken of "top" economists and financial analysts.

But has the recession really ended? It may feel like the recession has ended to the Wall Street firms that have received billions in so-called "bailout" funds from the government (more like "handout" funds), but for consumers on Main Street – no real upswing has been felt. And therefore consumers have the mistaken belief or hunch that bankruptcy can free them from the bondage of credit card debt.

But can bankruptcy really eliminate debt? Or are there superior bankruptcy alternatives today?

The problem with bankruptcy is that it causes more collateral damage than Arnold Schwarzenegger going toe-to-toe with the bad guys in a crystal and wine goblet shop. It can get ugly. Bankruptcy virtually destroys one's credit record. The bankruptcy filing will stay on the public record for up to 10 full years in many states. During this time it will be nearly impossible to obtain any kind of credit, even for a pack of gum.

The person who files bankruptcy can expect to be required to pay hefty deposits for future home utilities ordered – gas, electric, water, cable, phone, internet, etc. And they could also expect to be passed over for a job, as more and more employers are performing credit checks these days as part of their routine job applicant screening process.

Rather than looking for ways to file for bankruptcy, people should rather be looking for ways to avoid bankruptcy. In this way, the consumer can achieve true debt relief without all the harmful repercussions of a bankruptcy filing.

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Originally posted 2009-12-29 20:07:53. Republished by Blog Post Promoter

Chapter 7 Bankruptcy: The Facts And Just The Facts is a post from: IRS Tax Problems?

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Bankruptcy is one of those programs that people consider when their backs are up against the wall financially. It's usually a gut wrenching situation whereby the mortgage is months behind, car payments are falling behind, gas, electric – all these bills are probably late as well. But hopefully, food is on the table.

It's during these stressful, emotional times that all of a sudden the TV commercials run by bankruptcy lawyers start resonating with a person. "Get out of debt today!", "Improve your credit score!", "Get rid of all of those bills!", etc. Unfortunately, not is all it seems to be at first with bankruptcy.

In fact, rather than considering bankruptcy, one should in fact be considering ways to avoid bankruptcy. The reasons are as follows: bankruptcy has many troubling aspects to it. It stirs a virtual hornets nest of issues, and causes much, much collateral damage in the process, leaving a trail of financial destruction and ruin in its wake.

So what is the deal with bankruptcy? Well, for starters – it is by no means a simple walk in the park, as the bankruptcy lawyers would lead you to believe. In fact, one could argue that it is fact a rather dangerous walk in the park, say like a walk through Central Park alone at 2am, with shiny gold chains dangling around your neck. It is a minefield, and full of pitfalls.

The person who files for bankruptcy is basically destroying their credit record. It's an implosion, basically. There will be no chance to obtain credit from anyone during this time period because creditors will view the person's credit report as toxic. They wouldn't touch it with a 10-foot cattle prod. And how long does a bankruptcy filing stay on the public record? Up to 10 years in many states. Imagine that.

The person who files for bankruptcy can also expect to pay hefty deposits when they order new utility service in the future – gas, electric, water, cable, phone, etc. And quite possibly they could find themselves passed over for a job, as more and more employers these days are performing credit checks as part of their routine job applicant screening process.

Therefore, it's wiser to consider bankruptcy alternatives rather than bankruptcy itself when faced with mounting financial difficulties.

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Originally posted 2009-12-29 20:07:40. Republished by Blog Post Promoter

Avoid Bankruptcy At All Costs is a post from: IRS Tax Problems?

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Bankruptcy is almost like a 4 letter word. The sound of the word should have an emotional impact on hearing it. That's because bankruptcy is a very serious legal issue. It is by no means a simple walk in the park, as the cheesy bankruptcy lawyers would have you believe. Therefore, in this article we shall attempt to clear the air so to speak (nothing green intended) as to what bankruptcy is, what it does and what it does not do.

The first bankruptcy laws can be traced to the 1500's and Old England, the times of King Henry VIII in fact. In the United States, bankruptcy under went a major update in 1978. These updates and changes to the system are common referred to as the "Bankruptcy Code". And most recently, bankruptcy laws were changed yet again in 2005.

This latest bankruptcy reform tilted the scale to the side of creditors, as opposed to debtors. The reasons Congress acted on this was the perceived abuse of the bankruptcy system. It was perceived that bankruptcy lawyers were (and even still continue to) recommending bankruptcy as a form of debt relief. People were often racking up large amounts of debt and then claiming that they were unable to pay these debts.

But people are being misled if they think that bankruptcy is a free ticket out of debt. This is simply not the case. Bankruptcy does not dismiss debt outright. Creditors can still be sued for debts which are owed. Property, including homes can still be seized. And to make matters worse – bankruptcy has very serious repercussions which occur after filing. 

One's credit score takes an immediate hit and will actually hit a new low. Obtaining future credit will be nearly impossible, obtaining home utilities will be impossible without paying hefty deposits upfront, and one could very likely be passed over for a job, as more and more employers these days are performing credit checks as part of their routine job applicant screening process.

The bottom line is that bankruptcy is a very serious issue. If one is carrying huge amounts of debt and is looking for a way out, one should very, Very closely examine bankruptcy – but also bankruptcy alternatives such as debt settlement, debt consolidation, debt consolidation debt consolidation loans, and even consumer credit counseling.

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Originally posted 2009-12-31 07:25:12. Republished by Blog Post Promoter

What Are The Pros & Cons To Bankruptcy? is a post from: IRS Tax Problems?

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Bankruptcy lawyers – the lousy rats. They and their silly, ridiculous "Ghostbuster" style commercials – "We're ready to believe you!". Really, they have no shame. They would have you believe that bankruptcy is the pot of gold at the end of debt rainbow, the light at the end of the debt tunnel, the fairy godmother of your Cinderalla in debt tale.

Puh-lease.

Bankruptcy is akin to personal financial suicide. It destroys one's credit and credit worthiness. It causes more damage than 2 sumo wrestlers going toe to toe in a crystal vase shop. What a sight that would be on the evening news.

Rather than promoting bankruptcy, I would like to make you aware of bankruptcy alternatives. These are debt relief programs that get rid of debt like gangbusters. Credit card debt is what it is – a fact of everyday life. Unless you prefer to keep a stash of dollar bills under your mattress or in a shoe box buried in your backyard, chances are you have a credit card and some amount of credit card debt.

Avoid bankruptcy – this is what we should be trying to do at all costs. So let's discuss here in digital print why. As we mentioned, your credit score – you can kiss it bye bye if you file for bankruptcy. You can also expect the stain of a bankruptcy filing to stay on your credit record longer than a glass of merlot spilled on a white bear rug.

If you have the need to order new home utility service in the future such as gas, electric, water, internet, cable, phone – you can expect to be required to pay hefty deposits in order to get that service.

Thinking about renting an apartment? Think again. You will be denied based on your bankruptcy filing and your pitiful credit score. Folks, your average major league pitcher would have a higher batting average than the credit score of a person who files for bankruptcy.

What did that funk song from the 70's say? … "How Looooow can you go? How Looooow can  you go?" You feel me?

Like there is no WAY your credit score could get any lower.

Debt Relief – it doesn't have to be some John Mellencamp "Hurt So Good" kind of thing. it doesn't have to cause harm to have some minimal benefit.

The true debt relief programs that help without causi ng harm include debt settlement, debt consolidation & debt consolidation loans, as well as consumer credit counseling.

If you or someone you know are struggling with credit card debt, jump online and research these programs. And never, ever get involved with bankruptcy…

or a bankruptcy lawyer for that matter. But that's another story.

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Originally posted 2010-01-06 19:15:25. Republished by Blog Post Promoter

Bankruptcy Alternatives Explained is a post from: IRS Tax Problems?

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In the United States, bankruptcy is an option for businesses or individuals who cannot afford to pay their debt.

United States bankruptcy laws are defined in Article 1, Section 8, Clause 4 of the U.S. Constitution, which gives the U.S. Government rights to enforce "uniform laws on the subject of bankruptcies throughout the United States."

Chapters of Bankruptcy

In the United States, there are five chapters of bankruptcy, each of which coordinates a different type of debt with varying solutions. The five chapters of bankruptcy are:

Chapter 7

This is the most commonly filed chapter of bankruptcy in the United States. Chapter 7 creates laws regarding liquidation – the sale of a business or individual’s assets in order to raise money to pay off debt.

After Chapter 7 bankruptcy is filed, all nonessential or exemptible material is awarded to a third party trustee, who is responsible for liquidating these assets until debt can be paid. Chapter 7 is one option when involuntarily assigned bankruptcy.

Chapter 9

Available only to municipalities, this chapter is used to help restructure the debt of cities, counties and states. This chapter was famously used in 1994 by Orange County, CA to relieve more than $1.5 billion in debt.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is available to all businesses and individuals in the United States, but is primarily used by corporations. While Chapter 7 requires a third party trustee to coordinate liquidation, Chapter 11 allows debtors to maintain control of their assets and restructure in order to raise money to pay any debt owed.

Chapter 12 Bankruptcy

This chapter of U.S. bankruptcy code is available only to farmers, fishermen and their families. Chapter 12 was created in 1986, and was initially supposed to expire in 1993, but was continually expanded until being made permanent in 2005.

Aside from its higher debt ceilings and more exemptions, Chapter 12 is very similar to Chapter 13.

Chapter 13 Bankruptcy

This chapter is designated for individuals, and requires debtors to reorganize their assets under supervision of a bankruptcy court. Bankruptcy court will provide the debtor with a rehabilitation program to pay back debt owed over time.

Chapter 15 Bankruptcy

The final chapter of bankruptcy deals with cases of debt involving the United States and one or more other countries.

If one is in deeply in debt however, one should should look into all forms of debt relief and not only bankruptcy. These bankruptcy alternatives include debt settlement and even consumer credit counseling.

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Originally posted 2010-01-02 19:57:55. Republished by Blog Post Promoter

Bankruptcy & How To Avoid It is a post from: IRS Tax Problems?

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Have you thought of what options to take when faced with the dilemma of filing for bankruptcy? What are the necessary options, avoid bankruptcy for you to take?

Undoubtedly, the simplest of the many available bankruptcy alternatives is to keep a close watch on your financial position by making sure that you don't bite off more than you can chew. Believe me, it matters a lot. To become financially independent in the future, it would surely help to consider your options carefully.

avoid bankruptcy Guide

Besides keeping your financial position in tacked; one of the great bankruptcy alternatives is to ensure having a long-term plan in place is it a one year plan or five or even ten year plans such as a retirement plan, and start off as early as possible. In that case, if you run into some unfortunate event, then it will be of great help to you.

Choosing to create a one-year plan to address the problem of having a debt of ten thousand dollars on your credit card, would allow you to reduce this debt by half each year. Then plan your finances accordingly by setting small amount out of your monthly income and setting it aside to meet your debt obligations.

Another advice is to read books that largely focus on bankruptcy alternatives, and how to control your spending habits. Knowing about the bankruptcy alternative has slight chances of making you spend more now that you know how to avoid bankruptcy; we are trying to avoid that. So as much as possible, focus your budget on the things needed only. Believe me, it's all going to be worth it in the end.

Losing control of the debts is not a good thing, since it will draw you to bankruptcy. Avoid bankruptcy, bankruptcy alternatives don’t always work. Get aboard the debt-elimination wagon and save thousands of dollars and avoid being stress because of bankruptcy. And if you leave with one advice from this writing, take: Spend your money wisely!

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Originally posted 2010-02-22 13:48:55. Republished by Blog Post Promoter

About Bankruptcy Alternatives is a post from: IRS Tax Problems?

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