veral requests for consumer credit could be viewed negatively because the information is reported to the credit bureaus? This leaves you, the consumer, with a bad credit report. Household debt and bankruptcy are at record levels and appear to be on the rise. So what is bankruptcy all about? For most, bankruptcy is nothing more than a fresh financial start. It is designed to help those who are in debt beyond a reasonable means to repay. The law states that a person is entitled to start over financially so long as they have not been dishonest in getting into debt. Bankruptcy will wipe out all of your unsecured debts and let you keep most, if not all, of your property.Bankruptcy is written right into the Constitution (Article I, Section 8, Paragraph 4) and therefore, United States Bankruptcy Law has been around for more then 200+ years. Virtually every industrialized country in the world has the option of filing bankruptcy as a method of financial relief. Bankruptcy is the necessary safety valve in the free market system. Without bankruptcy, people that are over their head financially would give up or become part of the underground. While it is not easy to make the decision to file bankruptcy, over one million Americans survive it every year. There are four main types of bankruptcy: Chapter 7, 11, 12, and 13. Chapter 7 (Liquidation) is the most common. It is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Under Chapter 7, you may claim certain property exempt and a trustee may take possession of the remaining assets in order to liquidate them and pay your creditors according to priorities set forth in the Bankruptcy Code. Chapter 13 (Repayment of Debt) is designed for individuals who are temporarily unable to pay their debts, but would like to pay them in installments over a period of time. Chapter 11 (Reorganization) is designed primarily for the reorganization of a business. Its provi...
