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About Bankruptcy
The decision to file bankruptcy is one that must be thought out thoroughly. The lasting negative effects can limit financial options and the ability to obtain future credit. Bankruptcy often carries long term derogatory affects on credit and financial management and understanding. There are different types of bankruptcy, each having it's own guidelines and limitations.

Though bankruptcy may be a very good solution to a severe financial problem, filing carries negative effects that follow a debtor for a relatively long time. The debtor may lose property that is non-exempt (unprotected) and have to start over again in fulfilling their life long goals. Bankruptcy will appear on your credit report for seven to ten years depending on which type of bankruptcy is filed. Chapter 7 will normally be reported for 10 years because it does not involve any form of repayment plan to creditors, and debts are completely discharged. Chapter 13 may carry less of a dishonor and usually remains on your credit report for 7 years because the debtor arranged to repay a portion of the debt. 

Bankruptcy gives individuals the ability to "wipe the slate clean" and start over again. Although Bankruptcy may be a relatively quick and easy solution to financial woes, it's also a quick way to severely damage credit worthiness. Credit worthiness often requires a considerable amount of time, and there is no simple solution to damaged credit.

Often, consumers who are in the process of rebounding from bankruptcy and re-establishing credit, suffer financial penalties. Acquiring additional credit can be difficult, and if the consumer is granted credit, they may be penalized by a higher interest rate. Obtaining unsecured lines of credit such as conventional credit card can be difficult, but not impossible, immediately after filing bankruptcy if no collateral is present to offset the risk of loaning money.

The Process of filing Bankruptcy

Title 11 of the United States Bankruptcy Code governs bankruptcy proceedings which is a matter of public record. To file bankruptcy, you must first file a bankruptcy petition. You must also complete schedules of assets and liabilities, and prepare a statement of financial affairs. These forms will require you to list your property and account for recent sales of personal property, list your income, the debts that you owe, and account for any money that you spent during the two-year period prior to filing. You must list all of your debts on the bankruptcy petition. The bankruptcy court will require that you pay a filing fee, which is approximately $175.00 which is in addition to your attorney fees.

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