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Article By: RobertWise
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What Will Be The Consequences If You File For Bankruptcy?
Over the past few years, more and more people have accumulated huge credit card debt as well as very high mortgage obligations that they can no longer afford to pay. There are many unpredictable events that can cause people to become unable to meet their financial obligations: events such as an unforeseen illness or accident, loss of a job, a natural disaster, as well many other similar unfortunate situations. When people finally realize that their debt obligations have reached the point where they can no longer afford to make the required payments to their creditors, they may consider a drastic solution : filing for bankruptcy. There are many wrong assumptions about the subject of filing for bankruptcy, and in this article we hope to answer some important questions that you might have and dispel some of these wrong assumptions.
When should I file for bankruptcy?
Most bankruptcy attorneys advise a certain amount of debt before considering bankruptcy. In certain cases an individual can work with a credit counseling agency to help lower their monthly payments and learn how to manage their finances in a better way. The one absolute when it comes to filing for bankruptcy is waiting until the very last minute before being taken to court by your creditors.
Will my children's education money be lost?
Unfortunately, if your children's education fund is in your name it can be used as an asset and turned over to repay your creditors. However, if the money you have saved for your children's education is in your children's name, and not in your name, it may be exempt from the claims of your creditors. Debt collection agencies will attempt to use whatever method possible to recover the money that you owe your creditors and therefore you have to take appropriate measures to protect the finances of your family and your children
Any stocks or bonds that you have taken out to pay for the education of your kids will be considered to be part of your assets if they are in your possession and in your account, and therefore they can be used to repay your creditors.
For what period of time will my bankruptcy appear in my credit report?
Bankruptcy can remain on your credit report for up to ten years from the date of filing. Once the bankruptcy has been discharged all of the reported debts will show as zero. It will have an impact on your credit score but not nearly as bad as it was before.
After your bankruptcy you have a chance to learn from your previous mistakes and you can learn to manage your finances more responsibly in the future. Unfortunately some individuals seem to never learn from the past and find themselves in a financial bind over and over again.
Article Source: ArticleZones.com
About the Author
Author Robert Wise has been doing research and reporting on financial topics for years. You can get more advice on filing for bankruptcy at his web site.
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