Saturday, April 2, 2011

How Filing for Bankruptcy Impacts Your Future

Filing for bankruptcy of course can wreck your finances for a while but it can be difficult for your ego. Very few people will charge on a credit card or acquire loans with the intention of not paying them back. Typically something happens in their life, such as unexpected medical expenses or the loss of their job that finds them not able to meet their commitments. A few of the effects of declaring bankruptcy are almost immediate while others can be longer lasting.

Most of the debt tackled in bankruptcy is unsecured, just like credit card debt or medical debt. If the man or women is filing Chapter 7 bankruptcy, after the court approves the bankruptcy, these will just disappear. However, if there are secured debts, such as an auto loan or a mortgage, it is possible the car will be reclaimed and a foreclosure will be filed up against the home.

If you file for Chapter 13, you cannot choose which bad debts are included and which aren't. All debts, secured and unsecured are listed and the total amount of debt will be the amount on which your monthly payments are based. If you neglect to meet your agreed upon payments, your court trustee will tell your creditors and the case will be terminated. If that happens you can try to file Chapter 7 bankruptcy and hope to have it permitted by the court.

Regularly, the first effect you will see is the fact your creditors stop calling you, provided you gave them the name of your bankruptcy attorney, but they will also stop permitting you to use your credit cards. If your personal bankruptcy also incorporates medical bills your doctor or hospital may refer you to an alternative health care professional and refuse to take you as a patient.

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