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Are You Falling Behind in Paying Back Your Debt? Understand If Bankruptcy If Right for You

Who can file bankruptcy

Filing for bankruptcy can certainly be a discouraging process, especially considering the tarnished image it places on your credit financial status. However, it is important to understand that the involved benefits of filing bankruptcy, and the different options that are available. With the amount of bankruptcy filings expected to rise by 8% over the next year in the United States, it’s important to know all the ins and outs of the bankruptcy filing process.

Many people don’t know how to file a bankruptcy, or don’t know when should you file for bankruptcy. People turn to bankruptcy options for a number of reasons – a complicated health situation may have expended most of your finances, or an unforeseen accident could have run up your debt and prevented you from paying your bills on time. If you are already in significant debt, and don’t have the funds available to pay off your debts for the foreseeable future, filing for bankruptcy is probably in your best interest.

Most personal and business bankruptcy filings are under chapter 7 or chapter 13 bankruptcy. With chapter 7, a bankruptcy court will discharge most of the debts you owe. In exchange, the bankruptcy trustee can take any property you own that is not exempt from collection, sell it, and distribute the proceeds to your creditors. For businesses, a Chapter 7 bankruptcy trustee will often examine the finances of a business undergoing bankruptcy, and help to organize liquidation.

Common filing for personal bankruptcy involves chapter 13, in which an an organized payment plan is formed with the bankruptcy court to pay back all or a portion of your debts over a give period of time. The amount you have to repay depends on how much you earn, the amount and types of debt you owe, and the amount of property you own. In the United States, chapter 13 bankruptcies were down 10% between 2012 and 2013.

A common question among financially troubled individuals is knowing if can you file bankruptcy twice? Many people run into debt trouble more than once and wonder “can you file bankruptcy twice?” Fortunately, a bankruptcy claim doesn’t stay on your record forever. Once your bankruptcy case is completed, it could take 7-10 years for it to disappear from your records. Accidents and unforeseen financial complications can occur again. Should debts mount up again, you can absolutely file again if needed.
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