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USA Bankruptcy

USA Bankruptcy

When it is impossible for you to pay your debt or manage it any other way, US law provides the bankruptcy process which provides a way out for persons who can not meet their financial obligations.

One of the biggest reasons that bankruptcy takes place is that all other solutions and financial management programs have failed.

Below are a number of points surrounding US bankruptcy which may answer queries you have about your position.

1. There are two chapters in US Bankruptcy rules, Chapter 7 bankruptcy, which is “straight” or direct bankruptcy whilst Chapter 13 bankruptcy, which is reorganization. Both eradicate your debt leaving you debt free.

2. US Bankruptcy stops creditors from repossessing your vehicle and other personal property. Even if your vehicle has already been repossessed, by declaring bankruptcy will mean they have to return your car to you. That is your vehicle and any other assets.

3. If your home or other property is in foreclosure, Chapter 13 bankruptcy will prevent the foreclosure at any point prior to the sale. Therefore, the debtor can make missed payments at any time back to the mortgage company and retain the house. Bankruptcy will put together a debt management plan so that the debtor can pay back the mortgage arrears.

4. the biggest factor for filing for bankruptcy is where employment is lost. Imagine the scenario. Two people living together both are working and living comfortable life styles. The fact that they work allows them to be able to comfortable deal with the debt they accumulate through credit cards and loans. However this would all change should one lose their job. The income into the house is reduced significantly making it difficult for them to now deal with the debt they had accumulated, this can soon lead to further financial problems and ultimately bankruptcy.

5. Other factors that bring about financial difficulties occur when the debtor, or family are taken seriously ill, or are involved in a motor vehicle accident. Medical bills take up a lot of cost and in many cases leaves the person unable to work and therefore unable to pay the bills. Chapter 7 of bankruptcy reduces bills to a large extent.

6. Creditors are often harassed by the debtor who is keen to retrieve as much of the debt back as possible. They can pressure into paying off parts or all of their debt often leaving you in more trouble with other more pressing debts. They will call at your house or work, have been known to be abusive and threaten debtors. If the debtor files for bankruptcy you can no longer be chased for the debt and the creditor has to leave you alone.

7. Although a debtor could have made mistakes that resulted in the debt position they face, it is also possible that the debt was no fault of theirs. They are also people who should be afforded the same respect ad privacy that everyone else assumes.

8. Wage garnishment is a process where the debtor’s has his wages taken away from him. This will leave the debtor with no money and they would experience trying times. Chapter 7 of bankruptcy has a clause which will not allow this to take place. The clause will ensure that the debtor has enough funding to enable them to be able to urchase any necessities that are required to live. Chapter 13 also has some clauses which also help.

9. Bankruptcy can order consolidation of student loans to which the debtor is subject too. However it will not make the debt disappear. However, where consolidation is taken it can still be a an advantageous position for the debtor to file for bankruptcy

10. Bankruptcy enables the person in debt to challenge any person declaring themselves to be a creditor who is attempting to charge that person more money than they actually owe. Debt management consultants and lawyers are in a position to offer the necessary legal support and assistance in these circumstances. They may negotiate n your behalf between the creditor and the debtor.

For personal advice on your debt position, please call 0845 2267 153 or use anyone of the many contact options available through this web site, Finance Inc are happy to offer you free advice in circumstances were you find yourself in debt and in many cases can offer you the correct debt management solution for you situation.

For a complete debt management solution, visit www.finance-inc.co.uk

For IVA (Individual Voluntary Arrangement) visit www.1va.co.uk