Credit Card Study

What are Credit Cards
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Credit Cards - The Right Tool for Merchants
Credit Cards as a Credit Instrument
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Zero Rate Credit Card or Not

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Credit Cards and Debt
Avoiding Credit Card Debt
Bad Credit and Credit Cards
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Credit Card After Bankruptcy
Credit Cards and Credit History
Getting Out of Credit Card Debt
Filing For Bankruptcy
If a Credit Card Issuer Sues You
The Optimal Credit Card Balance
Credit Card Debt Refinance

Credit Cards and Fraud
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Credit Card Fraud Protection for Merchants
Famous Credit Card Frauds
Famous Credit Card Law Suits
How Credit Card Issuers Cheat
Merchant Credit Card Fraud
Protect Your Card
What to Do in Case of Identity Theft
How Consumers Cheat

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Filing For Bankruptcy

Being in debt and seeing no options to get out of it is very depressing. While in most cases it is your mistake that you are in debt because you have spent much more than you have earned, sometimes it is just circumstances outside of your control – like the death of a family member or long-term unemployment and/or disease that has pushed you over the edge.

In the beginning, it is important to clarify that bankruptcy is not the solution to your problems. Bankruptcy is your last resort, if you really, really can't make it another way. In recent years the number of individuals who filed for personal bankruptcy grew significantly, so it is obvious that many people misuse this life belt but as of the end of 2005, there are new, stricter regulations regarding who can file for bankruptcy and when.

For instance, one of the changes is that you can't file for bankruptcy right away; you must first go to a counseling course and discuss your financial situation with a professional consultant. The idea is that some counseling might help you find a way to repay your debts, rather than proceed directly for bankruptcy. This way you might be able to get to the surface without shock therapy (i.e. bankruptcy) and at the same time your creditors will get their money, rather than write it off.

Probably the major disadvantage of bankruptcy is that this fact will stay on your credit report for 10 years. So, after you are declared bankrupt, you will not have much debt (or any at all) but your credit score will be devastating. Until you clean it, you will hardly be able to get good terms for new credits but probably right now you are in the same situation, so it is hardly a gloomier perspective for you.

Filing for bankruptcy has many disadvantages, as you maybe guess but the fact that you emerge debt-free at the end is really an advantage. It is important to know that not all your debts will be waived. For instance, if you file for Chapter 7 bankruptcy, you won't be relieved of alimony, taxes, child support, student loans and some other types of debt. Under Chapter 7, you may also have to part with a substantial amount of your property because your creditors must be paid at least something.

The other type of personal bankruptcy is called Chapter 13. Under Chapter 13 you might be able to keep most of your property but the bankruptcy court takes charge of all your finances. Chapter 13 is suitable for people who have a regular income (i.e. a salary). Under Chapter 13 you might have to repay all or part of your debts and it is the bankruptcy court that determines the schedule of payment. Under Chapter 13, taxes are paid first, then comes the current landlord and all creditors that hold a secured debt (like a mortgage).

But no matter which bankruptcy type you choose, you need to know that both of them involve payment of court and attorney fees, which must be paid in advance, so you must have at least $500 before you file for bankruptcy.