Once Your Credit Card Deal Has Led You to Bankruptcy...
Bankruptcy
Probably, every credit card holder happened to overspend or to miss monthly payments at least once. And that is quite natural. Life is unpredictable and we face different situations and problems. One late payment will not destroy your credit history. But if you constantly exceed your credit limit, make late payments or do not get to pay off your balance at all you are most likely to face bankruptcy.
No matter what kind of a credit card deal has led you to bankruptcy. Actually, it is more your being unaware of some terms of your plastic, being unreasonable in your credit card use or some financial problems you come across, rather than a credit company's fault. Well, anyway, every plastic owner can find themselves bankrupt one day, for this or that reason. No one can feel secured against it.
If financial collapse has caught you unawares, this article will help you to find out a way out of this situation.
Once you face bankruptcy you become unable to pay off your debts. What you should to do to get discharged is to file a bankruptcy petition. The two most common types of bankruptcy under the Bankruptcy code, which is to be found at Title 11 of the United States Code. They are Chapter 7 and Chapter 13. To qualify for a discharge under any of these Chapters you are to pass the Means Test. Basing on its results the Court determines the Chapter you are eligible to file for.
Chapter 7 is called basic liquidation for individuals and businesses. In this bankruptcy case a bankruptcy trustee gets debtor's non-exempt property, sells it and distributes the money among the debtor's unsecured creditors. But you keep all your exempt property, like your house, car, clothes, household goods, etc. The debtor gets a relief of his or her debt, except for some debts like taxes, spousal support and some others. The Chapter 7 discharge can be granted only once in 8 years.
According to Chapter 13, rehabilitation with a payment plan for individuals with a regular source of income, a debtor remains the possession and ownership of all his or her assets, but he or she is obliged to keep paying off debts to creditors sticking to a repayment plan made up by the Court. Usually the debt repayment period lasts from 3 to 5 years.
No matter what Chapter you file for you have the right of the bankruptcy automatic stay. It is a law that forbids creditors to collect debts from you if you have declared bankruptcy. This law comes into effect starting with the moment you have filed a petition.
Bankruptcy is something you can get over. However, the disappointing fact that your financial collapse will be reflected in your credit history and will remain there for 7 years is something you will not be able to change. But, of course, you will have a chance to start over, you can reestablish your credit history and rebuild your credit score.
And in some years you will be able to get approved for a car, home loan and even might get numerous most beneficial offers from credit card issuers. But you're going to need much time and eternal patience to go though all hardships of bankruptcy.
God forbid that you will ever make practical use of this guide, but this can be a good help for you to calm down and collect your thoughts. The next wisest decision for you will be to consult a bankruptcy expert and to learn the basics of personal financial management. And keep your chin up, it will be all right!
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Comments
max, 01:49 AM, November 21, 2007
i wish i could have read this before...
Linda, 10:41 PM, April 08, 2008
Thanx God I haven't faced bancruptcy. I learned from my friend's mistakes. She filed for bankruptcy like 4 years ago, I guess. And now she's going through some really hard times in her life. She gets refused in getting a credit card or a loan like 8 times out of 10.
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