Filing for Personal Bankruptcy

Prior to filing for personal bankruptcy it is important to make some initial considerations. Are your debts dischargeable in bankruptcy, whether you want to keep part or all of your debt and the cost you may incur during bankruptcy. Also you may wish to consider the potential future impact it might have on employment and your ability to borrow money or start a business. It may affect your ability to purchase a house should you have to move.

Check with a credit counselor whether or not your debts are dischargeable. They will be able to advise you whether or not your debts will be affected by debt relief.

A secured debt is is secured by collateral, much as a mortgage or car loan. Most consumer debts are unsecured eg card debts, medical bills, legal fees, and utility bills. Secured debts are not ordinarily discharged in insolvency unless you surrender the collateral.

As strange as it may sound, you may not wish all of your debts to be resolved through the bankruptcy. You may not wish to lose your car for example.

You may wish to consider if the reason behind you going bankrupt will stop when you become bankrupt, or will they actually get worse. For some lifestyles it may not help.

Most people choose between a Chapter 7 (“Straight Bankruptcy” or “Liquidation”)  and a Chapter 13 (“Wage-Earner Bankruptcy”) bankruptcy. To find out the difference between these contact a debt counsellor or do further research.

If you do wish to file for personal bankruptcy or this article has made you have second thoughts consider contacting a debt counselor such as www.PayingPaul.com

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