Personal bankruptcy questions

There are millions of people who have filed for bankruptcy in the past, and with today’s economy, there are likely to be many more who will be filing bankruptcy now and in the near future.  If you are struggling to pay bills, juggling payments, falling behind in your mortgage or other bills, getting phone calls and letters from creditors or collection agencies, or feel overwhelmed with the amount of debt you have, you are not alone.  Filing bankruptcy may be your best option, but there may also be other alternatives you should consider. 

If you do decide that filing bankruptcy is your best option, you should consider hiring an attorney to help you. filing personal bankruptcy is not as easy as it used to be; Congress passed new laws a few years back, and those new regulations make filing bankruptcy more expensive and more difficult.

Depending on your personal income and other information, you may or may not be able to file under Chapter 7 regulations.  Chapter 7 essentially erases all debt except student loans, tax bills, and child support payments, but the new regulations say that if your income is above a certain amount - in comparison with the average income in your state of residence - you may have to file under Chapter 13 regulations. 

Filing bankruptcy under Chapter 13 regulations does not eliminate debt.  Instead, the bankruptcy court will “reorganize” your debt and make arrangements for you to pay back what you owe.  This can relieve you of a lot of the burden your debt is placing on you, but it will not eliminate your need to repay your loans.

You should realize that filing bankruptcy is the most devastating action you can take with regard to your credit rating, and even though you may have to file under Chapter 13 - and still pay your creditors - you will still have a bankruptcy showing on your credit history.