For anyone experiencing the burden of high credit card debt (or other kinds of debt), finding a way out can be an incredibly stressful problem that can wreak havoc on your family life and health. Is there any light at the end of the tunnel?

Well, one legitimate option that you should consider if you simply can’t pay all your bills is bankruptcy. The automatic stay provision in bankruptcy prevents creditors from trying to collect a debt after you have filed for bankruptcy.

Automatic stay is one of the most powerful and reassuring provisions of bankruptcy. Once you file for bankruptcy, there is an automatic court order which prevents companies from taking any further action against you until your case is resolved. Creditors cannot repossess your car, or begin foreclosure proceedings on your house, or try to garnish your wages through your employer.

Believe it or not, the creditors are not even allowed to contact you once you have filed for bankruptcy. If they do, they’ll have to answer to the judge and will probably have to pay fines as a result. Now, you still have to go through the bankruptcy process, of course.

You should understand that the automatic stay is a temporary procedure that gives you some breathing room when dealing with bill collectors. However, you have to go through the entire process to see what the outcome of your bankruptcy case will be. At the very least, the automatic stay gives you some temporary relief while you and your bankruptcy lawyer make your case.

One thing you may be worried about is whether the new bankruptcy law makes you ineligible to file for bankruptcy. The truth is that most people who would have qualified previously are still eligible to declare bankruptcy.

Your bankruptcy lawyer can explain some of the specifics such as having to undergo credit counseling and attend financial management classes as a requirement for bankruptcy. When it’s all said and done, bankruptcy is still an option for many people to consider in order to achieve a fresh financial start.

It’s true that the process is more involved now with the new bankruptcy code, but it is still a viable option for many Americans to consider. Your best bet is to learn as much as possible about bankruptcy from more articles like this one and then speak to a bankruptcy lawyer.

Filing for personal bankruptcy in the United States has reached epidemic proportions. The economy is partly to blame. Unemployment has reached a fourteen-year high. Bankruptcies in Florida are no exception. Deciding to file bankruptcy is not an easy decision for most people.

There are very few people who start out with the intention of filing bankruptcy. Circumstances often force people to change their best intentions. Most people want to pay their bills.There are consequences to filing bankruptcy that should be considered.

There are many considerations before filing bankruptcy.The most obvious consideration and consequence is your credit rating. Bankruptcies stay on your credit report for ten years. Bad credit rating typically stay on your report for 7 years, so 3 extra years may not seem that bad. Obtaining credit after either case will be more challenging and far more expensive.

Bankruptcy is a moral decision for many. You have been taught to pay what you owe. For many walking away from debt becomes a moral decision. This is especially true in the Christian community. However the laws of the land concerning bankruptcy are there to protect the citizens.

The economy needs productive citizens to function. Drowning in debt will never produce productive citizens. There is no law that says you cannot pay back your debts one you are re-established.

Is bankruptcy right for you? Deciding if bankruptcy is the right decision is a personal one. No two people or circumstances are alike. Seeking the advice of a bankruptcy lawyer is a good place to start. Most bankruptcy lawyers offer a free initial consultation.

Federal laws have established guidelines and metrics that help determine if you qualify to file bankruptcy.

The biggest mistake made by individuals filing bankruptcy is delaying the decision to do so. You know when your obligations are not being met. That is the first warning sign. The current in the stream of debt can be very powerful, heed the early warning signs, and make a decision. Once you have decided make sure to include all your obligations, as you cannot go back and claim you forgot a debt.

Once you have made a decision to file bankruptcy do not look back. Should you decide filing bankruptcy is not right for you, the same principle is applied. Take the time to make an informed decision by talking with your lawyer.

From that point forward you are on your way to financial recovery. There is something very liberating to telling bill collectors you have retained an attorney for the purpose of filing bankruptcy.

Chapter 7 bankruptcy is a liquidation proceeding. If you have some non-exempt assets, they’re sold by the Chapter 7 trustee and the money is dispersed to your creditors according to the priorities established in the Bankruptcy Code. In virtually all consumer cases, all assets are exempt. There are, therefore, no assets to sell and no money to pay out to creditors. Chapter 7 is ordinarily the least complicated and quickest form of bankruptcy. It’s available to individuals, married couples, corporations and partnerships.

Before you’ll be able to file Chapter 7 bankruptcy you’ll have to pass means test. The means test is a computation that compares your average income for the last six months, annualized, to the average income for families of the identical size in your state. If your income is less than or equal to the state average income, you “pass” the means test and may file Chapter 7 bankruptcy.

You Commence by Filing a Chapter 7 Bankruptcy Petition

Your Chapter 7 bankruptcy is begun by filing the official petition, schedules and statement of financial affairs. These forms ask you to name all of your assets and all of your debts, along with some recent financial history. This is the most important and most time intensive part of a bankruptcy filing.

It’s crucial that you list each of your creditors with proper mailing addresses. You must name each of your debts. You must even list those debts that are’t dischargeable and those you plan to reaffirm.

You must also name all of your property, along with any debts secured by that property, and the sale value of the property. “Property” as defined by the Bankruptcy Code means “assets” or “possessions.” It’s not confined to just real estate.

You must sign the schedules under penalty of perjury. You then file the schedules with the bankruptcy clerk in the district in which you reside.

After you file your Chapter 7 bankruptcy petition, all the following bankruptcy legal proceedings pertain to your state of affairs as it existed on the date of filing.

The automatic stay moves into effect upon filing the petition. The automatic stay creates a legal barricade to collection activities by creditors. They can no longer contact you in an attempt to collect a debt.

The court then appoints a trustee and mails notice to all your creditors informing them that you’ve filed bankruptcy. You’ll get a copy of that notice at the same time as your creditors.

Initial Meeting of Creditors

You must appear at a meeting of creditors. This is ordinarily called the section 341 meeting. It takes its name from the section of the Bankruptcy Code that describes the meeting. At the meeting of creditors, the trustee will interview you about your assets and liabilities. Your responses are given under oath and carry the penalty of perjury. Creditors can also question you about those issues, but they seldom do so.

After the Initial Creditors’ Meeting

If you own any non-exempt assets, the trustee will take charge of them. The trustee will sell the non-exempt assets and apply the income to the expenses of administering your case. He’ll also parcel out any left over money to creditors with allowed claims. Each claim is appointed a priority according to the Bankrtupcy Code. Those claims are paid in order of the priority of the claims.

The trustee may go over your income and expense schedule to see whether you have sufficient money remaining after your actual living expenses to pay something to creditors. Any money you make after the case is commenced is yours. It’s out of the touch of creditors who have dischargeable debts on the date of filing.

Usually, the only duty you have after the 341 meeting is to cooperate with the trustee by furnishing whatever info he calls for.

Receiving A Discharge

The trustee and your creditors get a 60 day time period following the 341 meeting during which they may challenge your right to a discharge generally or the dischargeability of a specified debt. Unless a request to deny your discharge is filed, the order giving the discharge of debts is issued by the court shortly after the 60 day period of time goes by. If one creditor files a dispute to your discharge it doesn’t preclude or holdup the entering of a discharge of the remainder of your debts.

As a condition to your discharge, you must finish a financial education course of study from an authorized provider. The class usually lasts for several hours. Many official providers have online classes available. Your failure to take the class and file a certificate of completion of the class can lead to your case being closed without entry of a discharge order. The court can charge you a new filing fee to reopen the case, file the certificate and enter the discharge.

You can normally expect your discharge inside 4-6 months of filing your case. The discharge impacts dischargeable debts that existed at the start of your case.

Some debts do pull through a Chapter 7 bankruptcy discharge. They’re excluded from the discharge by law. Those specific debts are taxes, child support, student loans, and liens. If you reaffirm any debts they also survive the bankruptcy discharge.