| Several thousands of Americans file personal | | | | Before Filing Personal Bankruptcy |
| bankruptcy even when they have better options | | | | There are several provisions in effect prevent abuse |
| available to them. A bankruptcy can stay with you | | | | of bankruptcy laws. People planning to file bankruptcy |
| for your life. Bankruptcy lawyers and counselors tell | | | | suits must first get credit counseling. Only |
| you that bankruptcy gives honest debtors a fresh | | | | government approved organizations can offer such |
| start. Keep in mind, the fresh start is a costly restart | | | | counseling. |
| of your financial life. Avoid it if you can. If it is | | | | The pre-bankruptcy counseling involves appraisal of |
| inevitable, you need to know your rights, limitations, | | | | individual financial situation, exploration of alternatives |
| and future possibilities. | | | | to bankruptcy, and preparation of a practical personal |
| Chapter 7 and Chapter 13 are the two personal | | | | budget plan. The organization is legally required to |
| bankruptcy choices available to individuals. Chapter 7 | | | | provide free counseling, if the individual can't pay for |
| is about liquidation of assets. It gives immediate relief | | | | the services. The fee is around $50. You will also |
| of debts. The trustee liquidates the assets and | | | | receive a certificate of completion of counseling. |
| repays the creditors. The property for which the | | | | There is also a debtor education session, which lasts |
| debtor has a right is not liquidated. There is little or no | | | | for about two hours. Your bankruptcy plea won't be |
| nonexempt property under Chapter 7 bankruptcy | | | | accepted unless you furnish the certificates. |
| cases. | | | | About The Credit Counselor |
| Another option is Chapter 13 bankruptcy. There is no | | | | Certificates from government approved counselors |
| immediate discharge of debts in this type of | | | | are needed for filing personal bankruptcy suits. You |
| bankruptcy. This is filed by persons who have a | | | | must take into consideration the kind of services on |
| regular income. The debtor promises to repay the | | | | offer. The services, fees, fee-waiver, if needed, the |
| debts over three to five years. The debtor can keep | | | | qualifications of the counselors, etc. are important |
| his or her properties. In both cases, the creditors are | | | | matters to discuss. Do your research on the |
| not allowed to initiate any action against the debtor. | | | | counselors before you sign up for their services. |
| Although no immediate discharges are available, this | | | | A credit counselor can also tell you if personal |
| plan covers more debts than Chapter 7 personal | | | | bankruptcy is the best choice you have. If |
| bankruptcy does. At the end of the three to five | | | | bankruptcy is inevitable, they can also tell you |
| year repayment plan period, the remaining unsecured | | | | whether to go for Chapter 7 or Chapter 13. |
| debts are discharged. | | | | Except in minority of cases, bankruptcies are due to |
| The payments are made through the trustee. | | | | the sloppy behavior of individuals. If you plan to |
| However, creditors can challenge the bankruptcy filing | | | | make a fresh start with a personal bankruptcy, make |
| at court. | | | | sure your personal finance decisions are always wise. |