Bankrupcy: How do I deal with it?
Bankrupcy is quickly becoming the only alternative for many Americans to save their financial assets and personal belongings. While most people perceive bankrupcy as failure, nothing could be further from the truth.
If you are facing bankrupcy, it is important to realize you are not a failure. Doing so generates a tremendous amount of negative energy towards yourself and others. Negative energy oftentimes leads to depression, which can lead to illness or even suicide. Instead of allowing financial stress to overwhelm your life, look for bankruptcy alternatives that can help you overcome the problem instead of escalating it.
There are many reasons people are forced into bankrupcy. A growing number of Americans are going bankrupt due to medical issues. This can be caused by lack of health insurance or a chronic illness such as cancer. Other causes of bankrupcy include loss of employment, death of a spouse and home foreclosure. Regardless of the cause, always remember there are solutions available to help you overcome the financial challenges you currently face.
If you find you have no choice but to file bankrupcy, you will need to locate a bankruptcy attorney. In 2005, bankruptcy laws underwent significant changes which have made it considerably more difficult to file for bankrupcy protection.
The Bankruptcy Abuse Prevention and Consumer Protection Act included a provision which states, "Americans who have the ability to pay will be required to repay a portion of their debts." BAPCPA also stipulates that any individual who files for bankrupcy protection must wait eight years from the date of their last bankrupcy before they can file again. In essence, the majority of debtors must now file for Chapter 13 bankruptcy; also known as reorganization of debt.
Chapter 13 allows debtors to retain their property through developing a repayment plan. The amount of debt which must be repaid is determined through the 'means' test. This test is based on each individual states median income level.
Technically, bankrupcy is regulated under U.S. Federal laws and governed by state bankruptcy courts. Therefore, if you are planning to file for bankrupcy protection, you will be required to adhere to the bankrupcy laws of your state.
Prior to filing bankrupcy, attempt to work out a repayment plan with your creditors. Oftentimes, creditors will accept less than is owed on the debt, particularly if you inform them you are on the brink of bankrupcy. Generally, creditors will be more accommodating if you can offer them a lump sum cash payment and a reasonable repayment plan.
If you are facing bankrupcy or foreclosure, contact Simon Volkov to determine what options are available. Additionally, browse our comprehensive blog article library to learn more about bankrupcy, alternatives to bankruptcy, how to hire a bankrupcy attorney, debt elimination and more.