Bankruptcy - Your Last Resort

General Information You Must Know

The United States Bankruptcy Courts have exclusive jurisdiction over bankruptcy cases.  You cannot file a bankruptcy in State Court. 

There are two primary purposes for bankruptcy law:

• To allow the debtor to make a new start without by removing the encumbrance of most debts (until new bankruptcy reform is enforced) and
• To allow the debtor to repay creditors according to the debtor's property available for payment.

Reasons why bankruptcy should be your last resort:

Chapter 7 filings are a matter of public record
• Credit bureaus will record your filing and keep it on your credit profile for 10 years
• Depending upon the state you live in, (a community property state), you may obligate your spouse even if your spouse did not sign on your accounts.
• If you are discharging a credit card debt, the card will be cancelled unless you reaffirm that debt
• Credit cards with a zero balance will be closed as well
• You have very little control over the disposition of your assets. A trustee will be assigned to your case.
• Assets in excess of your allowed personal exemption and non exempt assets such as real estate, boats and automobiles will be liquidated by the trustee in order to satisfy some of your debt.
• Recently passed bankruptcy reform will now require certain tests to be passed prior to allowing you to file Chapter 7. The purpose of the new bankruptcy law is to make those who can afford to pay some of their debts to pay them and force them into Chapter 13. Even if you manage to pass the Chapter 7 tests, you will be required to take an approved financial management course before receiving the discharge.
• New bankruptcy law passed as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has resulted in a complete shift in attitude towards Debtors. Instead of affording a “fresh start” for those consumers in the unfortunate predicament of having too much debt and not enough income, the Act fosters a more hostile approach holding Debtors responsible for mismanaging their debts and forcing Debtors to admit that responsibility. The overall aim of the new law is to make the Courts favor creditors; not debtors.

There are alternatives to bankruptcy you cannot afford to ignore:

• Debt consolidation
• Debt settlement

Stay informed. Remember, the largest debt you owe is to yourself.

This information is subject to periodic updating. It should not be relied upon nor is it intended to be or replace any legal advice. If you need legal advice please consult an attorney.

Debt Elimination is within reach!