How Bankruptcy is a solution to debt problems

Bankruptcy is considered the last resort or the ultimate solution to most problems of debt. If you have excessive debt, credit card or other debts such as medical bills, utilities, foreclosures, tax debts, domestic relations proceeding, the demands of contingency debts malpractice, etc., that could end with them by declaring bankruptcy. However, the decision to file for bankruptcy is not an easy task for most people because it involves a lot of prenatal care financial planning, legal advice and future consequences.

The U.S. Bankruptcy Court advises people to take the following precautions when filing for bankruptcy. The rules around declarations of bankruptcy are very technical, and one misstep can affect the debtor's rights and thus their right to file for bankruptcy. For example, if a debtor in bankruptcy may be dismissed for failing to file a document required a certificate of credit counseling, income and expenditure report, the SIN card, etc.

i) Bankruptcy is a long-term decision and has a lot of consequences in the future. It is therefore advised to hire a competent bankruptcy attorney or lawyer who has many years of experience and 100% success.

ii) Be wary of companies advertising that can help you file for bankruptcy more expensive than a bankruptcy attorney can most of the time, these companies are not really out to help, but only to defraud you of your money. These companies are by law not allowed to help file for bankruptcy clients, which only can help fill in the forms of bankruptcy. A bankruptcy attorney instead has the knowledge and experience to give legal advice, answer all your questions and help you through all legal proceedings, and set the credit counseling service of qualified credit counselor.

One of the most powerful features of bankruptcy is that debt collectors calling you, harass or threaten to pay outstanding debts. Once you file bankruptcy, all collection activity on the debt has to go through the bankruptcy court and creditors can not take any action against him. Following the declaration of bankruptcy, something called the "automatic stay" will come into force. The automatic stay prohibits creditors and collection agencies contact you or take any action against him, except for certain secured debts (see below). Let's review some of the debts can be discharged through bankruptcy and debt collectors who can not take any action against him.

TIP: It is necessary to stop the bankruptcy creditors calling you or threaten or harass you. Instead, you can write a stop contacting me letter to debt collectors and the Fair Debt Collection Practices Act (FDCPA), your creditors are not legally permitted to contact you for collection calls debt. Rather than threaten you by phone, you could threaten to refer to your phone calls to the police if they keep calling.

i) the credit card debt, medical bills or attorney fees

All debt collection activity in connection with credit card debt, medical bills or attorney fees must cease once bankruptcy. Creditors can not file a lawsuit against him and even if they do, they may proceed in court because you have the automatic stay (see above). Creditors can not also record liens against their property, forcibly seize his property (which makes threats of debt collection pointless), or a report of its debt to a credit bureau. In addition, any incorrect information spread over the bankruptcy is a violation of the automatic stay and is illegal in the eyes of the law.

ii) Public Benefits

Bankruptcy protects you from government agencies in court or complete their public benefits like Medicaid, Social Security Income or welfare benefits you are receiving. The only time you can interrupt the public service is whether the nature of being eligible.

iii) Criminal Procedure

Collection of criminal fines, debts or penalties including criminal fines can not be suspended after the bankruptcy. If you have a criminal case, you will still have to go through them with the pending bankruptcy.

iv) The exclusion Home

The foreclosure proceedings may be initially left off when you file bankruptcy, however, a builder or your lender may ask the judge to lift the stay and proceed with the foreclosure, so you should not expect the bankruptcy of suspend the home foreclosure proceedings. This means that homes and mortgages taken out on houses are not subject to bankruptcy protection. In addition, the automatic stay does not apply if you filed a new bankruptcy in the past two years and the court in this procedure allows the lender to continue the foreclosure process due to a determination that declared bankruptcy as a way to transfer their assets or interests unduly hinder or defraud creditors or a bankruptcy system manifold. In short, you can not avoid home foreclosure by filing a series of bankruptcies.

v) Evictions

An automatic stay of bankruptcy can not stop an eviction if the owner already had a trial that allows you to evict you from your property before the bankruptcy was filed. In addition, the owner may proceed with the eviction of the tenant if the tenant can prove that the property say a danger, as the illegal use of drugs, chemicals, grow ops, etc

vi) Utilities

Service companies that provides gas service, water, electricity, heating fuel or the phone can not suspend service as a result of the bankruptcy. However, they have the right to cut service 20 days after filing for bankruptcy if they do not give a deposit or other means to secure future payments of invoices.

vii) Income Tax

An automatic stay stops the Internal Revenue Service (IRS) issues a lien on your tax return or forfeiture of his property or income. However, the IRS may continue to demand the following personal tax files:

* File a tax return
* Make a Tax Audit
* Issue a notice of tax deficiency
* Take advantage of your tax refund to pay the debt a year before taxes.