DEBT MANAGEMENT » Get out of Debt

Ifthe process of filing a bankruptcy has left you wondering what all is involved, now's the time to learn. While the steps leading up to the actual event are rather involved, there are still some bankruptcy proceedings to consider afterfiling has taken place. Let's look at what they are:

• Automatic stay. The first step that occurs after filing a bankruptcy is the automatic stay. This is a notice that alerts debt collectors that they are no longer allowed to communicate with you regarding what you owe them.
• Meeting with the creditors. About a month later, the bankruptcy proceedings continue with a meeting with the creditors. During this meeting, you will discuss the filing and confirm that all eligible debts have been included and are valid. The trustee will attend the meeting and look for any discrepancies and inaccuracies that you've listed in your total debts owed.
• Property handed over for liquidation. In the meeting, if you have property that you have not listed as exempt, it will be given to the trustee to sell off as a way to pay your creditors. At this time, you will likely be informed that you are not allowed to give away, throw away, or sell any of your property without the court's prior consent.
• Obtaining a discharge. After filing a bankruptcy it usually takes somewhere between four and six months to receive the actual notification that you have been relieved of your the debts claimed during the bankruptcy proceedings. Until you receive your discharge, you can ask that the entire process be dismissed.

Understanding what happens during bankruptcy proceedings can give you a clearer picture of what to expect if you think you might go through with it. So before you get the process going, it's good to consider strongly what happens after filing a bankruptcy.

If you're having debt management problems, did you know there were several types of bankruptcy available to take advantage of? Someare meant for businesses while others were meant for personal finances, but it's good to know there are last-resort options to help fix money problems.

While there are numerous types of bankruptcy out there, most people and businessesare onlyeligible for one or two of four options. Let's look at what they are:

• Chapter 7 - Also known as personal bankruptcy, Chapter 7 helps individuals and businesses with debt management problems by completely eliminating unsecured debts. This process not only alleviates the need to pay back those bills, but also prevents collection agencies from contacting you regarding those debts. In other words, your slate is wiped clean. There are some debts that are not included in a Chapter 7 filing, including federal student loans and IRS payments. If you file Chapter 7, you can't again forsix years.
• Chapter 11 - Chapter 11 filings are designated for businesses and individuals that want to reorganize but not necessarily wipe their slate clean. This type of filing is usually much more complex than the Chapter 7 and requires the help of an attorney to complete.
• Chapter 12 - This is one of the types of bankruptcy that allows for repayment of debt. However, this is designated for family farmers only (see Chapter 13 for more information).
• Chapter 13 - Chapter 13 is becoming the most common way to take care of debt management problems when there is no other solution. Unlike Chapter 7, Chapter 13 doesn't wipe the slate clean. Instead, the courts work with you to set up a fixed monthly payment plan so that you can resolve all of your debts within a 3 to 5 year span. Taking this route helps you to keep the items you currently owe money on, rather than turning them over to the courts for liquidation.

You're probably wondering how in the world to choose among the different types of bankruptcy. Of course, for credit reasons, if you can avoid any of them, you probably should. But if avoidance isn't an option, you can look at what category you fit in,the amount of debt you have and how it can best be managed. Then with the help of the courts, you can choose the better of the four to help resolve your debt management problems.

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