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When you are in deep trouble with your finances, you may have tried just about everything to get out of your hole. Some like to go through credit counseling or get debt consolidation loans. However, those things don’t always work for everyone. In some cases, families or individuals find that bankruptcy is the only option that they have. Though this seems like the easy way out, most won’t advise it unless it is the only thing that can save them financially. Before anyone goes about doing this, they had better ask the right bankruptcy questions before they begin.

Asking the Right Bankruptcy Questions
One question to ask would be if they should do it on their own or if they should have a lawyer. Most are better off with a lawyer, but that is not always possible. This is a decision that each person will have to make, but it is one of the first bankruptcy questions that they should ask themselves. Some lawyers who handle bankruptcy know that money is more than limited, so they may take payment plans. Doing more research on bankruptcy lawyers can answer some of these questions. You may even find a great one through the Internet if you look around.

Bankruptcy Questions
Another of the most important bankruptcy questions that anyone should ask would be what this will do to their credit. Though some think that they are going to be better off, that is not always the case. You can get credit after bankruptcy, but it is not always the credit that you want, and it will come with a very high interest rate. Credit consolidation loans and other options should be considered first because they will not be as harmful to your credit situation as bankruptcy will be when it is all said and done.

Filing for bankruptcy is a difficult decision that requires careful consideration and weighing of all options. While once thought of as a taboo, now the practice is much more commonplace. A record-breaking two million Americans filed for bankruptcy last year.

If you decide to file for bankruptcy, you’ll want to have some idea about bankruptcy court, bankruptcy court procedures, who you’ll be interacting with, such as the bankruptcy lawyer and the trustee and what role each of them plays in the entire bankruptcy process. As bankruptcy law changes are plentiful, you will want to seek out the best resources to stay well informed.

Regardless of whether you file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, your case will be assigned a trustee. The trustee is the court appointed official of the Bankruptcy Estate who evaluates all your assets and administers the debtors bankruptcy estate.

Chapter 7 and Chapter 13 bankruptcy trustees are appointed by United States trustees. While United States trustees are government employees, Chapter 7 and 13 trustees are generally lawyers and accountants. Note that the trustee assigned to your case represents your creditors (not you) and is looking out for their best interests.

Trustees appointed to a Chapter 7 bankruptcy case usually have a more limited role than they do in Chapter 13 cases. First, your Chapter 7 trustee will be present at creditors’ meetings and ensure everything is going smoothly with your case. This meeting is typically called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.

A Chapter 7 Bankruptcy trustee will look at your list of assets (if you have any) to determine what assets are exempt from the bankruptcy proceedings. If you have non-exempt assets, your trustee will supervise the process of selling them and distributing the proceeds equally among your creditors according to the scheme of priorities in the Bankruptcy Code (these establish in which order debts must be repaid). The trustee also looks for fraud or abuse either by the debtor or the creditors. In some cases, he may have parts of the claims dismissed.

A Chapter 13 Bankruptcy Trustee is also in charge of reviewing your repayment plan and ensuring you have no difficulties following that plan. You will forward each month’s payment to him and he will distribute the funds among your creditors. Unlike with Chapter 7 bankruptcy, you can usually keep your assets in Chapter 13 since you’ll be repaying your debts either in full or part.

Ultimately, it’s important to keep in mind that the bankruptcy trustee wants to recoup as much money as possible for the creditors. Trustees who work on Chapter 13 bankruptcies earn a percentage of the money collected during the case.

Your Bankruptcy legal advisor should be able to respond to any questions and address any concerns you may have about the bankruptcy trustee as well as working with the trustee and going through the entire bankruptcy process.

Is There Credit After Bankruptcy?

If you are in the position where you are considering whether or not to file bankruptcy, you are probably thinking about your future credit options. Bankruptcy should be your last option when you are in debt, as you will find that your credit takes an even bigger hit when you file. However, this does not mean that you won’t get the chance to start over again once you file and get everything squared away. Always find professional help to hear all of your options, but if bankruptcy is all that you can do, you should know your financial world is not completely dead to you in the future. There is credit after bankruptcy.

There are some companies that will extend you credit after bankruptcy for the simple reason that they know you need it, and they also know there is an extended time between filing and when you might be able to file again. That means early on they know they have a better chance of getting their money out of you because you will not be able to turn around and file again if you default. They know you are a risk, however, and that means any credit after bankruptcy that you get will have a higher interest rate and higher penalties on late or missing payments.

You may even find that some of the companies that just lost out to you will try to offer your credit after bankruptcy. This happens when your debt is discharged and you are no longer in their system. Some companies are so large that they don’t keep track of these old debts that have been written off, and you could be anyone to them. The same rules will apply with this credit after bankruptcy. You will pay more for the privilege of having credit through them, even if they don’t remember that you have already been a customer.

When you are looking for credit after bankruptcy, remember that you have to use your head. You filed bankruptcy because your credit was bad, and you had no way to reasonably pay off all of your debts. If you have filed, you may not be in a better position, and getting credit directly after bankruptcy could put you back in the hole sooner than you think. It doesn’t make any sense to file and then put yourself right back where you started. Think about things before you do them, and make sure you know you are in a better financial position before you attempt any type of credit situation. If you need to, get help with budget, spending habits, and how to save your money for the future. Consumer credit counseling is always a smart idea in these cases.

More advice and Bankruptcy Articles

Bankruptcy is more than just a financial circumstance. It can be a very emotional time; with feelings ranging from depression, intimidation, worthlessness and shame. The stresses both before and after can take a toll on your family relationships, health and emotional well being.

Just because you file for bankruptcy does not mean you are a failure. You may have had problems with your finances, or job loss, or your spouse may have had medical bills that forced you into bankruptcy. Poor financial circumstances should not reflect on your self-worth. You can always do better in life, and following your bankruptcy, you will need to make positive changes.

Sadness and depression are the most common emotions that come into play when a person goes bankrupt. Feeling the guilt of “going bankrupt” or grief for assets you might lose in the bankruptcy process is normal. You may also experience sadness or depression about not being able to live the same lifestyle you had been living before the the bankruptcy (i.e., having to move to a smaller home or cut down on trips, recreation, etc…). Just know that cutting back on your budget might be something you need to do in the process to get yourself in a more secure place, financially. Be sure to discuss your feelings with a family member, friend, clergy or professional counselor.

Try not to be intimidated by the bankruptcy process. Take things slowly. Be sure to attend to all the dates set by the court (for adding new creditors to your bankruptcy, for meeting with the judge, etc…) and your bankruptcy process can run as well as possible.

You need to think positively during this rough patch in your life. Concentrate your energy on how your mental and emotional health will improve when you no longer have to worry about the bill collectors calling. Bankruptcy is a tool. You are using this tool to work out your problem.

Shame and embarrassment are typical emotions to experience at this time. Even going to a bankruptcy lawyer for the first time can be uneasy. However, you need to keep things in perspective. You are not the first person to go bankrupt, and you won’t be the last. Most importantly, you are taking action to rectify the problem.

Remember, failure in any area of life is only failure if you don’t learn from it. As long as you learn valuable lessons from your bankruptcy and apply those lessons to your life going forward, you have only experienced a setback, not a failure.

Business Bankruptcy

The economy has set records for the number of home foreclosures and late payments for mortgages and such. More people than ever are finding their credit scores drop and paying their monthly bills is a challenge. Personal bankruptcies are increasing. Small business owners are struggling along with the economy. When the economy slows down, so do the customers. Suddenly, the ability for businesses to make a profit is slimmer. Some owners are turning to business bankruptcy as something that just needs to happen. Most often, it isn’t that the business owner wants to file for bankruptcy, they feel that they have no other options. The creditors are knocking at the doors and wanting their money. The owners start to avoid taking phone calls because the amount of profit that they’re seeing simply isn’t enough to pay for the bills any more. There just isn’t as much of a profit to be made.

Business bankruptcy can be as difficult or as simple as you make it. Of course, the best way to achieve business bankruptcy is to hire a lawyer. Keep in mind, if you’re going to be including your credit cards on your list of debts to discharge, you may not be able to pay with a credit card. It is possible that the chosen attorney will require a retainer or a fee upfront. Depending on where your business is and what state you live in, it may cost a small business owner around $2,000 to file for business bankruptcy. Sure, you could save yourself that money and do all of the filing on your own. If you have the intelligence and experience to file for business bankruptcy, perhaps you can on your own behalf. However, it is always a wise idea to hire an attorney to finish all the details. If you don’t know the ins and outs of bankruptcy laws, hiring an attorney may save you a lot of grief in the long run. If the tiniest of details isn’t taken care of, it may just pop up someday in the future and come back to haunt
you. Have an attorney take care of as many details as possible. Make sure you check around for lawyer fees though. While court fees and paperwork may all cost the same, a lawyer’s time and own fees could end up fluctuating quite intensely. While you don’t want some attorney who isn’t organized and could end up messing everything up for you, you certainly don’t want to spend too much money on at attorney. Afterall, you’re considering business bankruptcy because you simply don’t have enough of money – not to accrue more debt to carry into the future.

Though choosing business bankruptcy can be a very emotional and difficult decision, it isn’t the end of the world. Know that times are tough and a lot of people are in your shoes and experiencing your same stresses. No regrets – move forward and learn from your experiences.

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