Bankruptcy, When All Else Fails
By Ben Needles
Bankruptcy can be emotional and embarrassing. You may have a hard time looking your children in the eye, and feel that you have let everyone including yourself down. The main thing is to promise yourself to learn from the experience, and try to change your life so that you dont end up back in the same situation again.

If you are a low income family, and have little or no actual assets you will probably want to simply file for a chapter 7 and discharge of debts. This requires that your estate be liquidated, and as much funds as possible divided up among your creditors. The remaining debt is discharged, and creditors are no longer allowed to pursue it but must write it off.

Liens on your house and / or vehicle should be examined to see if they are exempt from this process, and if not you will need to consider whether you should have them excluded from your chapter 7 filing. A house that is mortgaged for more than it is worth and has payments too high for you to realistically afford may have to be relinquished.

If you have good employment, but have had a tragedy including overwhelming medical bills or some other type of devastating but temporary setback, you may wish to consider a chapter 13 filing. This type requires a trustee to oversee your finances and work out a re-payment to submit to a judge for approval.

Normally, the chapter 13 repayment plan will call for a set dollar amount to be paid regularly for a specific amount of time, and the remaining balance will be discharged. Both you and your creditors will be expected to abide by the terms of the agreement. This ensures that you can continue to live normally, but gives you

the chance to catch up on bills and regain your stability.

A word on refinancing a home after a bankruptcy; many people think that this will be impossible, but there are many lenders willing to give second chances in return for your business, and in an odd way the confirms one thing - at least you arent a risk for filing as you will be disallowed from filing again for several years.

In fact, people who file often see their credit score bump up a little almost immediately. Strange as it seems, many lenders view filing for as a sign that you are trying to turn your life around, and by bearing that out over a course of a year or two you will probably be viewed as an average loan applicant rather than a high risk one.

The main thing to take away from a is self forgiveness and the determination to change your life and avoid having to ever take such action again. Learn from your mistakes, instill better financial practices in yourself and your family, and put the behind you. Move forward, and make sensible money decisions and financial choices a part of your everyday life!

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