Get Your Finances In Order Declare Bankruptcy

By: Yasha Spektor

The word "bankruptcy" evokes a grim smoke-filled room full of of men in dark suits wailing "I am ruined!" and throwing themselves out of the ornate windows onto the pavement below. Sometimes you feel like one of those guys - you may not have lost your billion-dollar fortune on a Stock Market, but your credit card debt is well into six digits, your credit rating is non-existent and you can't do anything about it because your salary doesn't grow by 20% a month - but your credit card balances do.

Your salary might be enough to live on, but not with the regular payments to the credit card companies. What's the point of having a job, if you don't see any of that big salary of yours? But you are afraid to quit because your salary is the only thing between you and those nasty phone calls from the collection agencies. Like those couple of times you had to postpone paying - one time because of that impulse buy of a huge flat-screen TV and the other time, right after that skiing trip - you still owe the hospital for that one - and it's more than you can ever pay. The hospital's collections people still call you sometimes, hoping to eke out a few bucks. Add to all that your student loans - and running away to hide in the Amazon jungle suddenly sounds like a great idea.

Well, bankruptcy is designed to offer you another way to break throw the thicket of interest rates and monthly payments. While there exists quite a number of different types of bankruptcies, you would want the type of bankruptcy called the "Chapter 7." In a Chapter 7 Bankruptcy, your debt gets discharged (Hurray!) but your valuables get taken away and sold to pay back your creditors (Bummer). Fortunately, the "valuables" mean exactly that - you'll get to keep all regular possessions, such as your clothes, furniture, sometimes even your car and your house - if they are not worth a lot of money. Your private island and your three-deck yacht would be seized and sold to pay back your creditors. What, you don't seem to remember where you put that private island? Thought so. If you are like most people who cannot keep up with their bills, you'll get to keep your stuff, but the debt will be discharged.

Finally, after you file your Chapter 7 petition in Bankruptcy Court, you will have to appear before a judge - a bankruptcy trustee. The trustee will make sure that you are trying to hide a family fortune from him (and your creditors), and, once he is sure, he will enter an order discharging all your debt. Well, not all - student loans "survive" the bankruptcy, which means, you would still be responsible for them. But, all your credit cards, veterinarian and grocery bills, auto loans and medical bills will go away. The trustee doesn't make his order final for a few months - just in case you happen to win lottery or receive a large inheritance. However, once the bankruptcy order becomes final, your ailing rich uncle can finally kick the bucket - your debt will still remain discharged.

Now you can finally take those motorcycling course you've always wanted to take, start saving and even get new credit cards! It's funny, but credit card companies like someone fresh out of a bankruptcy much more than someone with a lot of debt who hasn't declared one yet. It's simple - one can only declare Chapter 7 Bankruptcy once every 10 years and credit cards know that. So, while saving up is definitely a great idea, I can't say the same about getting new credit cards - remember, once you max them out, you won't be able to get rid of your new debt for quite a while. And, it does feel better without those monthly payments, doesn't it?

Article Source: http://yourfinance.co.za

About The Author
If you are somewhere in New York or New Jersey and are thinking to declare bankruptcy, I might be able to help - our law office helped hundreds of people discharge their debt. Once your debt is discharged and you are ready to start anew, read how to make money fast in this hilarious guide - GetRichandQuick.com.