Bankruptcy > There Are Two Types Of Personal Bankruptcy, What Are They?

There Are Two Types Of Personal Bankruptcy, What Are They?

There are two different types of personal bankruptcy that an individual can file, Chapter 7 & Chapter 13.
Chapter 7 allows you to disburse of most or all of your debts at the time of the court ruling. This method, however, has more of a negative impact on your credit rating and will stay with you longer?up to ten years. People who file Chapter 7 personal bankruptcy are considered to be a much more credit risk then those who file Chapter 13 personal bankruptcy.
In a Chapter 13 personal bankruptcy filing you pay off your debts in what is known as reorganization.

Through the courts, a court-appointed trustee will determine your new standard of living and how much of your income will be given to you to live on and will divide the rest among your creditors each month. For the next three to five years, you will have to live on a strict budget while your debts are getting paid. At the end of the reorganization your debts are considered paid in full, however, the record of your Chapter 13 personal bankruptcy will stay on your record for five to seven years.
In order to pay off your debts within the allotted time period, your debts may be reduced and your interest eliminated. You won't be able to obtain new loans or credit without the courts permission while you are on the program, as this would defeat the purpose of the debt reorganization.One of the main purposes of bankruptcy legislation is to afford the opportunity to a person, who is hopelessly burdened with debt, to free him or herself of the debt and start fresh - "almost like having a new lease on life." By law, all actions against a debtor must cease once you file bankruptcy.

Creditors can't initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments. Your wife or husband will not be affected if you file bankruptcy, if they are not responsible (did not sign an agreement or contract) for any of your debt. A number of banks now also offer "secured" credit cards where a debtor puts up a certain amount of money so you can still have a credit card. Two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed bankruptcy. However the fact you file bankruptcy stays on your credit report for 10 years.

It becomes less significant the further in the past the bankruptcy is. The truth is, that you are probably a better credit risk after bankruptcy than before..

Matt Clarkson is a specialist in both traditional and online business that has years of experience in borrowing money and investing for capital growth.The Free Information Online website is designed to help people find unbiased advice and tips with out the worry of any high pressure selling.For more free and unbiased advice go to? http://www.freeinformationonline.com

Ten Ways to Get Out of Debt

1) Use your AssetsIf you have assets with some significant equity, such as a home or a car you may be able to use these to get control of your debt. For example, you could get a loan on your home sufficient to pay off your debts. You could be saving a considerable amount of money on interest if you pay off high interest credit card debt in return for lower cost debt.If you have a car, consider selling it, paying off your debts and buying a cheaper car. Be careful though! Your don't want a "cheaper" car that will cost you a fortune in repair costs.2) Get a Second JobUse the money from this job to only pay off your debts. List your debts noting the interest rates.

Pay off the debts with the highest rates first and work your way down the list.3) Put your Credit Cards on HoldOne of the best steps you can take to get out of debt is to immediately stop using credit cards. At the very least destroy all your cards keeping just one card for emergencies.4) Set up a Repayment PlanCut back...

Ten Ways to Get Out of Debt

Bankruptcy > Ten Ways to Get Out of Debt

Debt Settlement & Income Taxes -- What You Need to Know

Debt settlement has become a popular approach to resolving problem debts without having to file bankruptcy. With this approach, creditors agree to accept a portion of what you owe (usually around 50% or less) to settle the account, and the remaining balance is forgiven. This technique will certainly continue to grow in popularity now that the new bankruptcy law makes it tougher to fully discharge debts in a Chapter 7 bankruptcy.

As with anything, there is no free lunch, and creditors are required to report canceled debts to the IRS on Form 1099 (when the canceled balance is $600 or greater). Therefore, the possibility exists that you may owe taxes on the forgiven portion of the debt. For this reason, many financial writers and debt counselors are strongly critical of debt settlement, to the point where they actually recommend against it just because you might end up owing taxes.

But the tax consequences of settling your debts are greatly over-emphasized, and this...

Debt Settlement & Income Taxes -- What You Need to Know

Bankruptcy > Debt Settlement & Income Taxes -- What You Need to Know

Smart Landlords Use Very Smart Leases

The longer you are a landlord the more you strive to create the perfect lease/rental agreement. Landlords learn in the school of hard-knocks that some tenants are certified trouble makers and we try our best to protect ourselves with a carefully structured restrictive lease.

That's just good business.... but be careful you don't include any provisions in your lease that may not be legal. For example...

It would be illegal to include a provision that states the resident agrees not to include his or her lease (the lease on your property) in their bankruptcy filing...

should their bankruptcy become necessary.

Bankruptcy laws are Federal.. lease law is state law.

Anyone can file for bankruptcy and invoke all protections afforded to them by the U.S. Bankruptcy Code... including not making lease payments... at least temporarily.

Here's another caution...

It would be illegal for your lease to require...

Smart Landlords Use Very Smart Leases

Bankruptcy > Smart Landlords Use Very Smart Leases

Ten Ways to Get Out of Debt

Ten Ways to Get Out of Debt

Bankruptcy > Ten Ways to Get Out of Debt