how bankruptcy affects divorce

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Filing for bankruptcy is an unfortunate decision, which some people have for dealing with issues such as divorce, unemployment and illness to make. These disturbing events can create huge debts, which are simply not returned. The last option most people want to examine ways not in bankruptcy, but if there seems no other choice, many people turn to the courts. Although it can immediate relief from debt collectors, there are significant long-term disadvantages for this option.

Changes in Bankruptcy Laws

In response to the rising number of bankruptcies each year, the government has a law that the bankruptcy process defines founded. For example, you now need to prove that you have received an appropriate financial advice from at least six months prior to submission. In addition, the government now determines whether a person has sufficient reason to not for a single judge has file. This process includes a "means test" that your ability to file Chapter 7 states that as "debt liquidation" means. Currently, you can be forced to return more of your original Have debts than you'd pay in the past.

What Property Owners Need To Know About Bankruptcy

There are two types of bankruptcy, a consumer to file under the national law. Each offers different financial impacts and protection measures. Both have different requirements that individuals must to meet prior to the filing. Both require court appearances and paperwork.

Under Chapter 7 bankruptcy, debts are discharged about three months after submission. IRS debt, child support, alimony, student loans and court judgments can not be discharged in Chapter 7 bankruptcy. Of course, not all other claims are fully necessarily be removed by a consumer. Other creditors, such as, for example, a mortgage or car payment, "affirmed." In other words, the consumer before the court agrees that he or she will continue to make payments on this debt.

This type of bankruptcy is an individual and the credit rating affect a number of years at least. The possibility is unlikely to financing for a home after such a declaration. Many lenders do not include loans consumer money to last for at least a year, others longer. Be aware that it is always better to sell your property voluntarily, before you lose them Bankruptcy.

Chapter 13 Bankruptcy Hurts Credit Score is less clear

Chapter 13 bankruptcy is much less severe. It's about the consent of the consumer before a court that they repay all monies to their creditors. However, the court can significantly reduce the late fees and interest, the consumer is Able to make payments to. Your credit rating will suffer during the period of repayment, and thereafter, but the creditors may not seek more than the decision to collect the court decrees.

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Schaumburg Divorce Attorney| Dupage County Bankruptcy Attorney| Anderson & Associates, P.C.

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