Attain Much Needed Relief From Debt By Filing Chapter 13 Bankruptcy

There are numerous circumstances that can lead to financial difficulties. Many of these are unexpected and at no real fault of the individual. In today's tough economy with rising inflation it seems that almost everyone is struggling to keep their head above water. Then add an unforeseen event such as a job loss, a divorce, or medical bills from an illness or accident, can be devastating to an individual or family. Then you have people caught in a financial mess when their mortgage adjusts and they can no longer keep up on the payments. Maxed out credit cards with their high interest rates seem to be unending and unpayable. Maybe the individual then turns to payday loans to kick the can down the road a little further but really they are only delaying the inevitable. These things can all contribute to financial disaster resulting in lawsuits, repossession of property, wage garnishments, and foreclosure. The thing to remember is that doing nothing will not solve the problem but actually make it worse. This is why the bankruptcy code was created. Filing bankruptcy offers people relief from overwhelming debt while allowing them the ability to retain personal property such as their house. Chapter 13 Bankruptcy, also known as reorganization bankruptcy, was designed for individuals such as these. Chapter 13 Bankruptcy is typically filed by people who are employed, have large amounts of debt, and want to be able to pay off this debt over an extended period of time all while under the protection of the law. Chapter 13 really appeals to people who have a fair amount of valuable personal property that they wish to keep in the bankruptcy filing. When an individual files a Chapter 7 Bankruptcy they eliminate their unsecured debts but they may lose personal property if it is not protected by exemption laws. Certain property is exempt, but if the individual has a lot of property or assets some of it may be non-exempt and sold in the Chapter 7 Bankruptcy to pay creditors back. This is why a Chapter 13 Bankruptcy may be a better fit for people that have non-exempt property that they want to keep. As long as the filer has a regular, predictable income then they are a candidate for Chapter 13. The filer along with their attorney will submit a feasible repayment plan with a three to five year timeframe to the bankruptcy court. The secured debts are the first to be paid with the unsecured debts getting whatever is left after the priority debts are taken care of. At the end of the arranged timeframe, if any unsecured debts are left over then they will be eliminated in the bankruptcy discharge. At any time during the three to five year repayment plan if the financial situation of the debtor changes, such as they take a cut in pay or lose their job, the Chapter 13 can be readjusted or converted to a Chapter 7. This is why it is a popular choice for many since the plan is so flexible and can be changed to accommodate the needs of the debtor. Filing Chapter 13 Bankruptcy will not only give you a fresh start but allow you the opportunity to take control over your financial situation.

Creating a Successful Debt Emergency Plan

You never think it could happen to you, until it does. Disaster strikes, a medical emergency appears, you lose your job, etc. Anything could happen, and at any time. Make sure you are ready for anything and everything. Organize Your Finances This should already be done, but if it isn't, get started right away. Having your finances organized can help you clean up an abundance of financial messes and will give you the clear mind knowing exactly where all your money is going. Also by organizing your finances regularly, you are able to see debt coming a lot faster, and then being able to prevent it. If you aren't sure where to get started, read Money Management Tips. Separate Bank Accounts After you have your finances in order, you need to have separate bank accounts set up. When you have separate bank accounts, you are able to split up your income into different levels of saving. You can put some into retirement, savings, emergencies, spending, etc. This helps you spend only what you allow yourself to spend, and also makes it so you have to contribute money into your savings and emergency funds. Sell Old Items After people stop using something they purchased, a lot of people decide to either keep it and let it collect dust, or simply throw it away. Learn to take these unused items and turn it into quick cash. This can be a great hobby, and can help you pay for a lot of unseen expenses as well. By doing this you are clearing out the clutter, and also helping yourself financially at the same time. Live with Less The mind sees material things that are nice, shiny, & new and creates a certain want for these items. Learn to settle for less, until you can actually afford it. After you start to buy used items or simply stop buying the things you don't really need, you start to re-program your brain. You start to realize that you don't really need those material things, and you slowly begin to not want them as well. In the long run you save hundreds, if not thousands, of dollars that can be put towards things that truly matter, like your future. If tragedy did strike, you have money saved up and ready for anything life can throw at you.

Financial Difficulties and Personal Bankruptcy

Financial troubles are not a fun thing to think about or even an easy thing for many to come to grips with. However, acknowledging the situation is really the first step when it comes to determining whether or not to declare personal bankruptcy. Personal bankruptcy really differs from case to case and person to person. As the term suggests personal bankruptcy is based on an individual or personal level as every individual's personal financial situation is different and unique. This can be explained according to an individual's own financial circumstances where financial difficulty is managed or resolved by filing personal bankruptcy. There are many variables that make up and affect personal bankruptcy. Some of these variables include employment status, income, medical bills, credit card debt, mortgage payments, etc. Whether these factors are beyond one's control such as a job loss or the result of careless overspending that led to overwhelming debt, they can all affect one's finances resulting in a bankruptcy filing. The bottom line is, once these factors have all been examined, the individual can then get a better grasp on their financial situation and determine the best course of action to take from there. Actually the first step in filing bankruptcy is to find a reputable bankruptcy attorney and discuss your options. Most bankruptcy attorneys offer free consultations which can assist the individual and educate them on the bankruptcy process. Learning about the different chapters of bankruptcy that can be filed, which chapter is best for them, and if they even qualify to file bankruptcy is essential. There are basically two chapters of personal bankruptcy one can file, Chapter 7 and Chapter 13 Bankruptcy. They are both very different and both have their own benefits depending on the individual's financial situation. To begin with, Chapter 7 Bankruptcy involves eliminating unsecured debts such as credit card debt, and any non-exempt assets are sold by the bankruptcy trustee so the proceeds can be distributed to the creditors. In most cases however, debtors rarely lose any property in the bankruptcy due to generous bankruptcy exemption laws that their bankruptcy attorney will use in their benefit. So basically in a fairly short time, about three to six months, the debtor will be debt free or close to it. This is a very popular chapter of personal bankruptcy to file since debt elimination is what most people are looking for, but there are certain criteria that must be met for the individual to qualify to file Chapter 7, such as income level restrictions and type of debt the individual has. Plus since the changes to the bankruptcy code back in 2005 it has become more difficult to apply for. That is why it is always best to have representation from an experienced bankruptcy attorney to assist individuals and assure that their bankruptcy is a smooth process. Chapter 13 Bankruptcy on the other hand involves a reorganization of one's debt. This means that the debtor and their attorney will come up with a repayment plan that will last for three to five years. Many people find that their financial responsibilities are easier to handle using a court approved payment plan. The debtor is protected under the law and cannot be harassed by creditors since the automatic stay that prohibits creditors from all contact with the debtor is in place during the entire Chapter 13 process. Secured debts are paid by priority first, then unsecured debts are paid after with the remaining timeframe of the payment plan. Any remaining unsecured debt left over at the end of the timeframe is discharged. Whichever chapter of personal bankruptcy one decides to file, the end result will be that the individual will be on the road to financial freedom.