The decision to file for Bankruptcy is not an easy one. It can be terrifying and demoralizing. However, you are not alone. Over 1.4 million people filed for bankruptcy relief in 2009, and over 1.5 million filed in 2010, which was an 8.1 percent increase, according to the United States Courts home page (http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx). The two types of Bankruptcy for individuals and families are Chapter 7 and Chapter 13. Both have pros and cons, so you need to think about such things as whether or not you want to keep your house, or a second car. Chapter 7 is generally for unsecured debt, and will leave your house and vehicles alone. Car payments and Mortgages are typically left alone, as they are considered secured debt. (http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/seventh_chapter.htm) Chapter 13, on the other hand, is for debt repayment in three to five years of reduced debt. You make a list of your debts, and a repayment plan which your creditors they either approve or deny. If you have made the payments as promised within that time frame, your remaining debt is then discharged. (http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/thirteenth-chapter2.htm) The best thing you can do when considering whether or not to file is to ask around for the name of a good bankruptcy attorney who can explain your options to you. I did when I asked family friend who happened to be an attorney. While I was emotionally devastated at the time, I am now glad I went through it. My attorney was kind and professional, and led me through the process of filing for bankruptcy, through the court date and ultimate dismissal of my unsecured debt. She had me go through courses in future financial health and management, which included the following tips: • Record all your ATM/Debit transactions in your checkbook • Set a monthly budget by listing your monthly income and setting expenses that are less than that income, and stick to it. • Establish Long and Short Term Financial Goals. Long term might be setting aside $1,000 for your child's college tuition. Short term might be setting $1,000 aside for holiday spending. • Reconcile your checkbook on a monthly basis to account for all fees and interest to your account. This will also give you an accurate portrait of how you are financially faring. Part of being financially sound is being honest with yourself about how you are handling your finances. It is never easy to do so, but it is ultimately what will keep you solvent and the creditors away. When you are filing, be honest with your attorney and the courts. Don't leave assets off your list just because you don't want them taken away from you. It may be necessary in order for your bankruptcy to be approved. The bankruptcy will only stay on your credit report for only ten years, and your credit will improve in less time than that. Take heart, and know you are doing what you need to do for your financial sanity.
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