According to ABC News, 76% of Americans are living paycheck to paycheck. Thanks in no small part to the economic downturn known as the Great Recession, many Americans are not able to make it from week to week without getting completely bogged down in their bills. Eventually, they have to start cutting corners to pay different debts at different times. In the end, this simply leads to more debt.
Fortunately, American law allows for financial protections when citizens of the United States file for bankruptcy. However, Americans need to be made aware of the facts surrounding bankruptcy myths and bankruptcy tips and tricks before they enter into any sort of bankruptcy proceeding. If you or someone you know is looking into Chapter 7 and Chapter 13 bankruptcy, here are four important facts to know.
- It is Nothing to Be Ashamed Of
- You May Be Required to Undergo Counseling
- Chapter 7 and Chapter 13 Do Vastly Different Things
- Bankruptcy is Dependent on Debt
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Many Americans refuse to even consider bankruptcy info because of their pride. However, if they realized just how common and acceptable of a practice bankruptcy is, they would be far better off. Consider, according to Sports Illustrated, 75% of professional athletes have either gone bankrupt or are facing financial difficulty only two years after ending their career. Many other celebrities, Mike Tyson, Elton John, Larry King, and others, have all filed for bankruptcy. If these multi-millionaires are entitled to bankruptcy, why shouldn’t you be?
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One of the most important bankruptcy tips and tricks to keep in mind is that you will likely need to undergo credit and financial counseling before being allowed to proceed with bankruptcy. This is especially true of Chapter 13 bankruptcy which seeks to restructure debt instead of eliminating it completely.
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Not every form of bankruptcy is created equal. This is especially true when considering the bankruptcy tips and tricks associated with Chapter 7 and Chapter 13 bankruptcy differences. Most importantly, Chapter 7 bankruptcy allows debtors to completely discharge all or part of their debts. On the other hand, Chapter 13 is used to negotiate restructured debts into payment models that work for both debtors and lenders. However, with both Chapter 7 and Chapter 13, debtors are unlikely to be able to relieve themselves of student debt.
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For some types of bankruptcy, U.S. Bankruptcy Code dictates that certain financial statistics must be met and not exceeded to be eligible for bankruptcy protections. For example, when filing for Chapter 13 protections, secured debt cannot exceed $922,975 and unsecured debts cannot exceed $307,675.
Debtors Are Not alone%3Cbr%3E
Too often, when facing financial hardship, debtors make the mistake of trying to go through the bankruptcy process alone. However, even with keeping these four bankruptcy tips and tricks in mind, it is difficult to navigate the waters without help. Bankruptcy litigation attorneys can help all debtors through the process of the multiple forms of bankruptcy to help them improve their lives. While past success does not equal future victory, doing nothing will get debtors nowhere. In short, keep these tips in mind, but do not be too proud to ask for help.
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