Bankruptcy is a legal procedure under federal law. It is a process where you can eliminate or discharge your debts in a Chapter 7 or if you are able to pay a portion back to your creditors there is Chapter 13.
Under a Chapter 13 you will be repaying your debt over a 3 to 5 year period. Once you do file all collection activity from your creditors MUST stop. No more phone calls, no more collection notices in the mail. Under Chapter 7 there are certain exemptions in your state. You can protect at least one vehicle up to a certain value and in most states there is a homestead exemption that protests your home up to a certain value.
Deciding between a Chapter 7 and Chapter 13 can be difficult. Consulting an attorney is highly recommended. Most attorneys have a free consultation so take advantage and go see an attorney. Write down all your questions before you go to your first appointment. You may want to see more the then one attorney before you make a decision.Check out the Legal Service in your state. Money is another issue when considering Bankruptcy, how do you pay for it most attorneys will allow for a payment plan be sure to ask. In most states you will find free legal aid. Hawaii has Legal Aid Society of Hawaii. However there is always going to be the do it yourself person and you can choose to do it yourself; there are many self help books and information available on the web to help education yourself. But whatever you decide to do investigate your options before you make a decision to file.
Alternative to Bankruptcy:
This of course just names a few. Locating the right specialist to help you is very important. It’s important you work with a company that is reputable and experienced in credit repair and debt settlement. Getting a referral from an attorney, friend or family member is top of the list. The internet is also a great place to look but be careful and investigate the company before signing any contracts. Check with the Better Business Bureau (BBB) in your area.
Once you find a specialist they will go over your financials and credit report and let you know the areas they can help you. They can also help you with a budget and get you back on track. If you already have a bankruptcy discharge they can help you re-establish your credit. Credit Repair and Credit Counseling Nationwide can help you with your decision. Don't be embarrassed or afraid to ask for help.
Bankruptcy is a huge decision that will affect your credit rating for 7 to 10 years. Make your decision with a complete understanding and knowledge you have done your best to obtain. There are many people in your situation you are not alone. Below are some stats for Hawaii and across the country. A great resource is National Bankruptcy Research Center where you can find even more information and stats.
Hawaii’s 358 March filings were up only one case from March of last year’s filings. National news has bankruptcies down 3% from this time last year and 45 of the 50 states showing decreasing figures. California however is seeing an increase.
Whatever your situation maybe consider all the alternatives first, it's a big decision. Get several options from different sources. Knowledge is power so get yourself educated to make the best decision for you.