Many consumers have been finding the tough economy a bit too much to handle of late and the number of bankruptcy filings are practically on the rise. In fact, the financial trend has changed so much that what was once considered a social stigma is now being embraced as an opportunity that’d help clear the slate plus provide for a fresh financial start. The different types of consumer bankruptcy and the costs
It’s undoubtedly hard to face at times, but when financial conditions become difficult so much so that it’s impossible to continue any longer financially, then unwittingly enough you’ve got to call for personal bankruptcy. Following are the 2 most commonly used forms of personal bankruptcy -
- Chapter 7: This happens to be one of the most common forms of bankruptcy filing. As a bankrupt person you’ve got the opportunity to retain essential property. As for those properties that are non-exempt, then they’re sold off and the proceeds from it happen to be distributed to the creditors. However, fact remains that in maximum Chapter 7 bankruptcy cases, there are no assets.
- Chapter 13: This Chapter of bankruptcy on the other hand allows you as a consumer to keep most of your assets or at least some of it. Rather a schedule for repayment of these debts is worked out and it’s based on your future income.
The time frame involved for consumer bankruptcy
Yes, there’s a certain time frame involved for consumer bankruptcy. However, it varies depending on your individual circumstances as well. As for Chapter 7 bankruptcy, then it’d be a matter of a few months. However, you’re required to go through a consumer counseling course within 6 months prior to filing bankruptcy. Now, this is essential and don’t make the mistake of avoiding it for otherwise your bankruptcy petition would be rejected. As for Chapter 13 bankruptcy, then it’d take anywhere between 3 to 5 years for the repayment scheme to be fully realized.
The effect bankruptcy has on your FICO score
Bankruptcy will always be considered a rather negative impact on your FICO score undoubtedly. Now, as for the level of impact that it’ll have on your FICO score is something that completely depends on your entire credit profile. For instance, if you’re one who had spotless credit and a rather high FICO score, then you might as well expect a huge drop in it. Again on the other hand, if you already had negative items listed on your credit report, then a modest drop in score is expected with bankruptcy filing. Most importantly, the more accounts included in the bankruptcy filing, the greater will be the impact felt on your credit score.
The requirement of a bankruptcy attorney
In case you find it completely difficult to stop your collectors from calling you, then you might as well consider a bankruptcy attorney. When looking for a bankruptcy attorney, take care to find the right one.
Keep in mind the above facts when filing for insolvency, and then you’ll be better equipped at handling the process altogether.
This Guest Post has been written by Christina Haze who’s known as insolvency expert and has written a lot of well-researched stuff on it. Her articles are widely read and sought after. For more information on bankruptcy you may visit: http://www.ovlg.com/bankruptcy/