| Most people who are considering bankruptcy are | | | | event of you file for chapter seven you will not have |
| looking at either chapter seven or chapter 13. Chapter | | | | to take that as part of your income - you are |
| seven is when you are dealing the unsecured debts. | | | | removing the liability. It also does well with vehicle |
| This is a very quick process and only takes 90 days | | | | leases. |
| or so to complete. Chapter 13, however, is a much | | | | Most importantly, your credit score is likely to go much |
| more involved situation which includes all debts and | | | | higher. When you are filing for bankruptcy and you are |
| everything you own from your house to your car. And | | | | discharging these debts you are eliminating a lot of the |
| you will be in bankruptcy for at least three to five | | | | bad things that are in the credit report. That means all |
| years. | | | | your bad credit report is moot. All your bad credit |
| Why would someone resort to filing for bankruptcy? | | | | report will be consolidated in one public record. It may |
| Most people think that it is last resort. On the contrary, | | | | sound strange, but if you think about it, your credit |
| the last resort one should take is to allow your credit | | | | score will go up since the first one will go to an entirely |
| destroyed then file bankruptcy. The truth is a 90 day | | | | new record and you can start anew. Of course, this |
| payment on a credit card has as much impact on your | | | | does not apply to everyone, but it deserves |
| credit score in a negative way as the public record for | | | | consideration. |
| filing for bankruptcy causes. These two are equal in | | | | There is also the downside of bankruptcy. If you plan |
| the amount of damage that they can do to your credit | | | | to buy a house or a car in the next two years, having |
| score. | | | | a record for bankruptcy on your credit report will |
| What is the positive aspect of it? First, eliminate all | | | | definitely keep you from being able to get it or it can |
| your unsecured debts which include all your credit | | | | also cause to make you pay a much higher interest |
| cards, anything that is unsecured except for student | | | | rate. Granted, it is okay to pay a much higher interest |
| loan, federal tax and state tax debt. Liability can be | | | | rate, the question is, would you pay more during that |
| removed as well. If you are going for a short sale or | | | | period? The reality is that most people who would |
| foreclosure you already have gone through one, your | | | | consider filing for bankruptcy do not think of buying a |
| tax liability will be forgiven, which is also called debt | | | | home or any property. |
| forgiveness income, where they forgive the debt that | | | | If you are considering filing for bankruptcy, it is better to |
| you had, writing it off. In return they will 10/99 you which | | | | do it using chapter 7. That way, it can even help boost |
| has to be reported in your taxable income. Prior to that | | | | your credit score in the long run. |