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What You Should Keep In Mind Before Filing For Bankruptcy |
By:
Robert Wise |
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What You Should Keep In Mind Before Filing For Bankruptcy
Robert Wise
Over the past few years, more and more people have accumulated huge credit card debt as well as very high mortgage obligations that they can no longer afford to pay. There are many unpredictable events that can cause people to become unable to meet their financial obligations: events such as an unforeseen illness or accident, loss of a job, a natural disaster, as well many other similar unfortunate situations. When people finally realize that their debt obligations have reached the point where they can no longer afford to make the required payments to their creditors, they may consider a drastic solution : filing for bankruptcy. There are many wrong assumptions about the subject of filing for bankruptcy, and in this article we hope to answer some important questions that you might have and dispel some of these wrong assumptions.
When should I start filing for bankruptcy?
The majority of attorneys who handle bankruptcy cases will advise their clients not to file for bankruptcy until they have reached a certain amount of debt. In some situations people can be assisted by a credit counseling service in finding ways to manage their debt and lower their monthly payments. One thing that you should do when considering bankruptcy is to wait to file until the very last moment before your creditors take you to court over your debts.
Will I lose the funds I set aside for my children's education?
Unfortunately, if your children's education fund is in your name it can be used as an asset and turned over to repay your creditors. However, if the money you have saved for your children's education is in your children's name, and not in your name, it may be exempt from the claims of your creditors. Debt collection agencies will attempt to use whatever method possible to recover the money that you owe your creditors and therefore you have to take appropriate measures to protect the finances of your family and your children
If you have purchased stocks and bonds to help provide for your children's education, and they are in your possession and in your account, these will be considered your own personal assets. Any assets that you own will be examined by a bank appointed trustee and can be used to repay your debt.
How long will my bankruptcy be on my credit report?
Your bankruptcy can remain on your credit report for as long as ten years from the time of filing. However, after your bankruptcy your debts will no longer show up on your report. Filing for bankruptcy will definitely have a negative effect on your credit but not quite as bad as before the bankruptcy, when you were unable to pay your debts.
Now you have a good opportunity to learn from your bankruptcy mistakes, and to start managing your debts more responsibly than you did previously. Sadly there are a lot of people who won't learn from their past mistakes and will find themselves in serious debt once again.
Author Robert Wise has been investigating and reporting on http://businessandfinanceonline.com/ financial topics for years. You can get more information on http://businessandfinanceonline.com/2008/01/19/filing-for- bankruptcy) filing for bankruptcy at his web site.
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Article Source: http://www.statssheet.com/articles/article67299.html |
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