Bankruptcy Xml

Today, America's economy is suffering, especially the employment and real estate markets. Everywhere you look, people are out of work, underemployed, or suffering from an underwater mortgage. A lot of people are experiencing financial problems for the first time in their life for reasons beyond their control.

Fortunately, even the United States government supports filing for bankruptcy. Where the term bankruptcy once carried a social stigma, today, it is a commonly accepted fact of life. There is absolutely no reason why anybody should have to struggle with crippling debt when they are incapable of paying it back. Bankruptcy offers a light at the end of the tunnel and a fresh start for those individuals who feel they have no way out of their financial obligations.

For many individuals, the hardest part of filing for bankruptcy is arriving at the decision to file. By the time most people decide to file for bankruptcy, it's their last resort. Once you decide that you need to file for bankruptcy, the question is which bankruptcy is right for you? For most individual filers, their options are Chapter 7 and Chapter 13 bankruptcies.

A Chapter 7 bankruptcy is a "liquidation" bankruptcy. Meaning, the filer will liquidate some of their assets in order to pay off their debts. A number of assets are covered under bankruptcy exemptions; however, many bankruptcies are "no asset" bankruptcies where the filer doesn't have enough allowable assets to liquidate so they don't give up anything.

A Chapter 7 bankruptcy allows the debtor to discharge (wipe out) their unsecured debts. These include: credit card debts, medical expenses, taxes (over 3 years old), and personal loans. What cannot be included in a Chapter 7 are student loans, alimony, child support, recent taxes, court ordered fines and victim restitution.

This bankruptcy is reserve for those that really need it. In order to qualify for a Chapter 7, you must pass the "bankruptcy means test." This test compares your income and the size of your household, to the median income for a household of your size for your state. If your income falls below the median income, you pass. If your income is too high, you will be diverted to filing a Chapter 13 bankruptcy instead.

In a Chapter 13, your debts are reorganized into a monthly payment plan you can comfortably afford. In the end, you could wind up paying a fraction of the original loan amounts, and this type of bankruptcy is paid off in a 3 to 5 year time period. This bankruptcy is especially good if your home is going into foreclosure and you want to remain in it.

Both bankruptcies experience the benefits of the "automatic stay" that is put into effect the moment you file with the bankruptcy court. An automatic stay puts a halt on debt collection activities until the bankruptcy is discharged. This means that creditors and bill collectors are prohibited from contacting you by mail or by phone. What's more, it is entirely possible to begin rebuilding your credit following your discharge. With sound budgeting and following a few simple rules, you can be on your way to re-establishing your fico score within a few short years after the bankruptcy is discharged.

Eastwood Law is a bankruptcy law firm located in Yakima, Washington. At our firm, we offer a wide variety of bankruptcy services including: debt relief, debt settlement, loan modification, foreclosure, repossessions, Chapter 7, Chapter 13 and more. We can explain the means test; let you know what to do before getting a credit card after a discharge, how the filing process works, and what life after bankruptcy is like. We believe that everyone deserves a second chance and a fresh start. We urge you to contact a Yakima bankruptcy attorney from our firm by calling (509) 426-4774 or you can visit our website at http://www.eastwood-law.com/Bankruptcy/Chapter-7.aspx.

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