Home Law Once I Declare Bankruptcy, What Can I Expect To Happen To Me?

Once I Declare Bankruptcy, What Can I Expect To Happen To Me?

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Many people would benefit from filing for bankruptcy, but they don’t because of the stigma attached to it. By debunking bankruptcy myths and explaining the procedure in Chapter 7 Business Bankruptcy, you can move forward with a little more assurance.

Legal Shields From The Automatic Remainder

An “automatic stay” is issued by the bankruptcy court shortly after a petition for bankruptcy is filed. You are immediately protected from any attempts at collection thanks to the automatic stay. If you’ve been getting calls from collectors many times a day, this is great news. Your bank account and wages are protected from wage garnishment and other debt collection tactics by the automatic stay. As long as the bankruptcy proceeding is ongoing, this stay will remain in effect.

Liberties Preserved During Insolvency

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Many potential debtors have told me that they are hesitant to file for bankruptcy because they are afraid of losing their possessions. Whether you file for Chapter 7 or bankruptcy chapter 13 will usually determine the answer. When you file for bankruptcy under Chapter 7, also known as a liquidating bankruptcy, you are required to sell off part of your assets in order to repay a portion of the funds that you owe to creditors. However, not everything in the bank is up for grabs.

Certain assets, such as a home, automobile, and retirement savings, can be shielded from liquidation in a bankruptcy case thanks to exclusions. As a result, Floridians can keep a sizable portion of their assets while filing for bankruptcy, making the state a desirable option for those seeking to liquidate their possessions. The majority of the customers who file for bankruptcy at our offices in Orlando and Kissimmee do not lose anything other than their debts.

When filing for Chapter 13 bankruptcy, commonly known as reorganisation bankruptcy, you and the bankruptcy trustee will work together to develop a strategy for paying back your debts. To spare you the hassle, we deal with all communication with them. Any remaining debts after three to five are dismissed at the conclusion of the case. You get to keep everything you own in a Chapter 13 bankruptcy, including any collateral you’ve put up against a secured loan. You can keep most of your possessions as as you adhere to your payback schedule.

A Chapter 13 Bankruptcy, Then, What Is It?

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It involves rearranging debts with the federal government. Our goal is to have you pay back as little as possible to your debtors. Let’s say we establish a plan to repay 15% of your debt to creditors over a period of 5 years, based on our analysis of your income and expenses. A total of 85% of residual debt will be forgiven once the repayment plan is finished.

Implications For Your Credit Rating

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A bankruptcy filing will have a negative effect on a person’s credit rating. But occasionally in a good way. Yeah, I’m aware of it. Watcher talking about Willis? as Arnold would say on Different Strokes. When you declare bankruptcy, your outstanding balances are completely wiped out, which can result in a falsely elevated credit score. Having a bankruptcy on your credit report lowers your score. When there is a significant amount of debt, the credit score may not drop as much as one may expect.

Despite the drop in your credit score, you should still file for bankruptcy. As a matter of fact, the repercussions of postponing the filing are sometimes more severe than those of the bankruptcy itself. A person’s credit score might decline even more if they have many defaults, missed payments, or collection attempts on their record.

Never ever use the services of a Credit Counseling and Debt Settlement company to help you with your financial woes. The creditors who do not cooperate with these businesses can sue you, and you may wind up getting ripped off as everyone else here has.

There are also significant tax consequences for using debt settlement companies. I repeat: don’t do it. Having the notation “MANAGED BY DEBT COUNSELING AGENCY” appears on your credit report is like shooting yourself in the foot.

When your unsecured debts are discharged in bankruptcy, you can start working on rebuilding your credit score. With time and effort, you may improve your credit score and increase your chances of being approved for financing. After a bankruptcy case has been finalized, we always advise filers to maintain a close check on their credit reports. At no cost once a year, people can access their credit reports.