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What You Should Keep In Mind Before Filing For Bankruptcy

Jan 29, 2008
In today's uncertain economic times, many people find that they are falling beneath a ton of debt. The reasons are several and in many cases are through no fault of their own, yet the unfortunate result is the same. As more people find themselves becoming unable to pay their debts, they are forced to consider bankruptcy as the ultimate solution to their financial problems. Unfortunately there are many myths involving the whole bankruptcy process, but in this article we will try to answer many of the most common questions that people might have. We hope you will find the information and help that you are searching for and so desperately need.

At what point should I consider filing for bankruptcy?

Bankruptcy lawyers usually advise their clients to wait filing for bankruptcy until debt obligations reach a certain level. In some cases bankruptcy can be prevented with the help of a credit counseling agency which may be able to find ways to manage an individual's debt as well as reduce his or her monthly payments. Before filing for bankruptcy you should wait until the last minute before your creditors take you to court.

Will my children's education money be lost?

Unfortunately, if your children's education fund is in your name it can be used as an asset and turned over to repay your creditors. However, if the money you have saved for your children's education is in your children's name, and not in your name, it may be exempt from the claims of your creditors. Debt collection agencies will attempt to use whatever method possible to recover the money that you owe your creditors and therefore you have to take appropriate measures to protect the finances of your family and your children

Any stocks or bonds that you have taken out to pay for the education of your kids will be considered to be part of your assets if they are in your possession and in your account, and therefore they can be used to repay your creditors.

How long will my bankruptcy be on my credit report?

A bankruptcy filing can remain on a person's credit report for as long as ten years. This will certainly have a negative impact on your credit score, but after the bankruptcy is discharged your previous debts will appear as zero on your credit report.

Now you have a good opportunity to learn from your bankruptcy mistakes, and to start managing your debts more responsibly than you did previously. Sadly there are a lot of people who won't learn from their past mistakes and will find themselves in serious debt once again.
About the Author
Author Robert Wise has been doing research and reporting on financial matters for years. You can get more information on the bankruptcy process at his web site.
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