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How Bankruptcy Courts Help In Fighting Against Financial Crises

Facing a foreclosure can be the most challenging and confusing situations in an individual’s life. In a situation where you are close to losing all your properties because you don’t have money to pay off your loans, one of the most common solutions can be a bankruptcy filing. Even after being associated with a number of negative aspects, bankruptcy can prove to be one of the most helpful options when you do not know how to deal with severe debt crises.

Before opting for bankruptcy, it is always wise to seek advice from some reputed attorney or debt solution services in order to obtain adequate information regarding your legal rights and alternatives. However, in circumstances where bankruptcy is your last resort, it can be highly comforting to know the various advantages involved in the process, which can provide you assistance and support during the crisis periods.

In a situation when you are already confused and overwhelmed under the outrageous impacts of a debt burden, constant harassments from creditors can be too much to handle. It leads to circumstances where you do not even know whom to turn to for help. Bankruptcy courts can provide you instant relief from these harassments by accepting your bankruptcy petition and declaring you bankrupt, thereby prohibiting lenders from making direct contacts with you. The moment you are declared bankrupt, the creditors are legally bound to stop harassing you for money and communicate with the court for any of their concerns. This is a great relief during severe financial difficulties.

Another noteworthy advantage of bankruptcy filing is that it uses the power of the automatic stay to relieve you of any lawsuit that might have been filed against you by the creditors. An automatic stay is an order issued by a bankruptcy court that becomes active the moment you file for bankruptcy, thereby helping you in protecting your properties from being sold for a definite period of time.

The extent of help you might get against foreclosure depends on the type of bankruptcy you opt for. For example, chapter 13, bankruptcy provides a complete relief from the stress and hassles of foreclosure and also offers you easy repayment plans to enable you to pay back the debt amount as per your affordability and conveniences over a definite time period. Within this period of time your creditors are legally obliged not to make contact with you as long as you are consistent in making payments.

On the other hand, assistance provided by chapter 7 bankruptcy has certain limitations to it. It cannot provide complete relief from the hassles of foreclosure since creditors can resume with the lawsuit once the bankruptcy procedures come to an end. It does however help you with some valuable time to arrange for money in order to pay off the debt amount and protect your properties from being sold. Again, it does help you with several tax benefits.

However, in certain situations, bankruptcy courts fail to help debtors against foreclosure.

In case, creditors file a petition with the court to remove the automatic stay and the petition is accepted by the court, the normal duration of the automatic stay gets reduced, and the lenders are once again allowed to sell off the mortgaged properties.

Automatic stay becomes invalid in case the bankruptcy filing is done after the foreclosure notice has already been sent to the owner of the mortgaged property.

Finding the Best Bankruptcy Information

In some cases debt can be so overwhelming you have no idea where to turn for assistance. You do your research and there are so many options available to help you with debt relief from consolidated loans to insolvency.

Most people will go online and read through the hundreds of articles associated with debt and how to overcome it, probably as you are doing right now. The fact of the matter is that the best place to get bankruptcy advice is from an experienced and knowledgeable company that has years of experience in the industry.

You can use the internet to find one of these companies, though do some homework before contacting them.
You are looking for a company that has a stellar reputation and is known for their reliability. You won’t find proof of this on their website, but if you do a search for their company name, then you will often find honest customer reviews on forums, giving you some indication as to the type of company you are dealing with.

The company you choose to get bankruptcy information from should be knowledgeable on the subject and have years of experience going through the process. This is not an easy process to go through, there are statements, petitions and proof that is all needed to determine whether your file will be accepted.

The process may sound daunting, but if you have the right bankruptcy information and you trust the company you are working with, then there is no reason it shouldn’t be all smooth sailing from there.

So many people are under the false impression that insolvency is only available for companies, but after the recession and so many people suffering throughout the world by debt, it is not available to private individuals. It gives you the ability to be complete debt free and enjoy a fresh start within twelve months.

Some of the bankruptcy information you can expect and that you will go through with your consultant is your assets. Ideally when filing for insolvency, you want as few assets as possible. If you own your own home, they will expect you to sell the property to pay for the debt. But if you rent and still don’t have money to pay back the debts, insolvency may be the right choice for you.

Those who are approved for this type of debt relief don’t have high profile jobs, such as lawyers, accountants and doctors. Most of the people being approved are regular middle class families who found they were sinking in debt after one or both of them lost their jobs when their employer closed their doors during the recession.

It’s very important to be aware that you are not alone and you shouldn’t be embarrassed for seeking bankruptcy advice. The company you choose should provide you with all the relevant details, helping you make an informed decision on whether to go ahead or find another alternative to sort out your debt.

If you own an expensive vehicle, then you may find you are turned down and told to sell your vehicle to repay the debt. Assets are an important element when filing for insolvency, be as honest as possible with your consultant, ensuring they can help you decide if this really is the best choice for you.

The company you choose should offer you complete support throughout the entire process from the day you call them for the first time until you are completely debt free. They should handle the process on your behalf from filing the petitions to contacting your creditors, taking the stress of the situation off your shoulders.

Being Debt-Free Isn’t Just Old Fashion It’s Wise

In the past, the idea of being debt free was common. Our grandparents had savings accounts and prided themselves on not owing anyone a thing. Even back as far as the 1960s, there was virtually no credit available except to buy a home or an automobile. Initially, there were no credit reporting agencies and it was hard for a family to get a loan. Because of this, most people used layaway plans at department stores to make large purchases. People would come in and make monthly payments on a large purchase until it was paid off and at that time would take it home. I remember being a kid and my family buying our first color TV in this fashion.

Now, being debt free is a thing of the past. Creditors have done a good job selling Americans on the idea of having it now and paying for it later. Most people in credit card debt are paying for items they might not even own anymore. This is why filing for bankruptcy has become so popular over the years. Filing Chapter 7 bankruptcy will eliminate all unsecured debt including credit cards. Because of this some Americans have no problem charging up their credit cards beyond what they could ever pay back having the knowledge that all they have to do is file Chapter 7 bankruptcy and wipe it out.

In the early 2000s, Americans went out on spending spree based on the equity in their homes that they bought and couldn’t afford. They leveraged everything they owned to live a rock star lifestyle. What happened to the old days when our grandparents were proud to say they were completely debt free?

In 2007, it was time to pay the piper and many Americans were faced with no equity left in their home to borrow on and not enough money to make ends meet. Many lost their homes to foreclosure and were forced into filing bankruptcy as their only option. The lucky ones that had enough equity in their home or a good paying job at a company that wasn’t closed, made it through. Fast forward to now, with all the quantitative easing, banks are pushing out credit and people are once again overspending on their credit cards and taking the equity out of their houses as the real estate market is rebounded almost back to what it was in 2006. All of this is setting up for a repeat of what happened in 2007-2008. Most people don’t realize that America never recovered from the last collapse. Because of the dollar being the reserve currency of the world, and the US has the ability to print dollars at will. It’s worked for the last 40 years, but now most of the world is now questioning the value of the dollar. Now more than ever, Americans should be wary of getting themselves deep in debt. It’s just a matter of time before this house of cards will come crashing down. Now is the time for the wise to become debt free at all costs.