After Chapter 7 Bankruptcy

After chapter 7 bankruptcy, a person can breathe a little more freely as a tremendous amount of debts can be absolved that before were impossible to get out from under. Chapter 7 bankruptcy is a legal action by which a person's financial assets are liquidated in order to cover the individual's outstanding debts. The funds are most often entrusted with a trustee, who manages the funds during the time an individual is unable to pay. Those who are at risk for having to deal with the results after Chapter 7 bankruptcy should be aware of the fact that there are alternatives. A person does not necessarily have to take such drastic measures in order to pay off debts, and could benefit if a few simple tips are kept in mind.

There are hundreds of people on a regular basis who face bankruptcy due to unexpected finances, the loss of a job with a steady income, inadequate funds to keep up with necessary bills, or a combination. In other words, there many reasons for how and why a person might find themselves trapped in a seemingly impossible situation with nowhere to turn for relief. Wise decision making and planning is important early on in a person's financial dealings in order to avoid falling into a dismal situation, or at the very least, to help the situation to refrain from becoming dire. Good financial planning is vital to a secure future, but unfortunately not everyone has access to, or the knowledge to prevent unpleasant occurrences. Those who find themselves facing life after chapter 7 bankruptcy should not despair as there will still be ways in which they can rebuild and get out from under oppressive debt, "Be of good courage, and he shall strengthen your heart, all ye that hope in the LORD" (Psalm 31:24).

People affiliated with businesses, such as business owners, or organizations could choose to hold out in the hopes that they will be able to break even without having to liquidate any holdings. There are several different chapters and codes of law that relate to bankruptcy and the different aspects and details. After chapter 7 bankruptcy can unfortunately be one of a person's only solutions to an overwhelming amount of debt. Those who are in the business realm and choose to remain in the current position they are in should take the steps necessary towards the filing of a petition under the Bankruptcy Code chapter 11. Chapter 11 spells out the ways in which a debtor can either extend the deadline for payment or in the very least reduce some of the debt. Another alternative occurs if a person's case falls under chapter 13 of the Bankruptcy Code. The aspect of chapter 13 that serves to set it apart from all the rest is that a person will most likely be able to refrain from having to lose a home to foreclosure. This is made possible due to the code's allowance for a period of allotted time during which a debtor is allowed to do what is necessary to catch up on back payments.

After chapter 7 bankruptcy has been filed is a time that should be taken seriously as the action can have serious effects on a person's credit history and be a black mark that could follow them for many years. After alternatives have been sought and no plans prove successful, the petition for filing as bankrupt should begin. There are several pieces of evidence a person must present in a court of law as evidence that the only course of action left to them is such a particular one.

The pieces of evidence that are required consist of a document or documents that officially state a person's current income is insufficient to pay of the amount of debt, secondly, official documentation of current assets and any holdings, and several other documents such as those pertaining to the financial history of the debtor. A petition can be filed jointly, such as a husband and wife, or separately, just as long as all the evidence provides all the necessary information of all included, such as proof of income, spending history and habits, and so on. People who wish to proceed with such actions should be aware that there are additional costs as the court system charges multiple fees for various tasks, such as the filing of reports and administrative work that are sometimes only realized after chapter 7 bankruptcy.

Rules can vary slightly for those who desire to absolve all debt, versus those who require partial relief. Complete elimination of all debt would require a person to not only file with chapter 7 but have the petition converted to one covered under chapters 11, 12, or 13 as well, since various rules apply to different situations. After chapter 7 bankruptcy, a trustee has the job of handling all of a debtors liquidated assets. The trustee is responsible for reselling all properties, or for debtors who had a business, the trustee can be required to run whatever business for a set amount of time in an effort to generate more funds to help pay off the outstanding debts.

Once a person has finally come to the end of the process they can begin to work on rebuilding credit. The process might slow but several years after chapter 7 bankruptcy a person can enjoy the amount of freedom that comes when tremendous debts are lifted off shoulders and the future can be looked to as being full of opportunity, and hopefully, wise monetary planning to avoid ever falling in such debt again.

Employment After Bankruptcy

Debtors need employment after bankruptcy, but many may be denied job opportunities simply because of past financial failure. A bankrupt individual is like a teenager who is repeatedly turned down for jobs because he lacks experience. But if he keeps on getting turned down, he will never get the experience he needs. Somebody has to take a chance on the youngster and give him his first job. Likewise, employers must be willing to take a chance on hiring someone who has been bankrupt. Many businesses tend to shy away from employing individuals who have filed for consumer debt protection because they often deem them to be financially irresponsible. But when it comes to finding work, no one needs a job more than someone who has had to file bankruptcy, especially when indebtedness is due to joblessness. And while the U.S. Bankruptcy Court forgives debtors who have debts discharged under a Chapter 7 petition, some prospective employers do not. But forgiveness of debt is a Biblical principle beautifully illustrated in the 18th chapter of the Book of Matthew. "Then the lord of that servant was moved with compassion, and loosed him, and forgave him the debt." (Matthew 18:27). Although consumer debt protection provides a legal solution for individuals who find themselves unable to honor financial obligations, the effects of bankruptcy on employment opportunities may place job seekers in serious jeopardy, unless employers are willing to give them a second chance.

Finding employment after bankruptcy can be quite a challenge! Applicants applying for work in banking, retail merchandising, government, security, and outside sales have always been routinely screened by prospective employers to verify clean credit records, clear criminal background checks, and negative drug tests. However in recent years, extensive screening, including credit checks, has become the norm for increasingly more occupations. An individual may possess all of the qualifications, but if a Chapter 7 or 13 proceeding appears on the credit report, they may be denied the job. The Fair Credit Reporting Act requires consumer reporting agencies to divulge information (good or bad) about job applicants to business owners requesting it. Since Chapter 7 and 13 bankruptcies remain on a consumer's report for as much as ten years, debtors with blemished financial records face real obstacles when seeking employment after bankruptcy. The best recourse is to inform interviewers regarding any discrepancies that might be found in credit reports or background checks before they discover them. Fortunately, some companies realize that bad things do happen to good people. They may choose to overlook negative financial histories and hire a bankrupt individual based on past work performance, experience, and professional qualifications.

While Section 525 of the U.S. Bankruptcy Code prohibits discrimination against anyone solely on the basis of insolvency, employers have a right to selectively screen individuals before hiring them, and it is difficult to prove discrimination. Their concern is a legitimate one: Individuals working in financial, government, high security, or retail occupations are more at risk for embezzlement, bribery, fraud, or robbery if they have personal money problems. Business owners may feel that the temptation to steal company funds or to become involved in fraud is just too great for individuals undergoing financial hardship.

Employment after bankruptcy is not a "walk in the park. The effects of bankruptcy on employment opportunities even extend to employment with family members. In 2001, the Insolvency Amendment Act prohibited bankrupt individuals from being hired by a relative who manages or controls a business or enterprise. In addition, anyone whose case has not been discharged is also prohibited from owning or managing a business. If self-employment during proceedings and working for an entrepreneurial aunt or uncle are prohibited, the chances of finding gainful employment after bankruptcy become even slimmer.

When a worker files for consumer debt protection, the effects of bankruptcy on employment opportunities also include potential job advancement. Future promotions, merit raises, transfers and job security may all be in jeopardy. While consumers who file Chapter 7 have dischargeable debts wiped clean, those who file Chapter 13 are obligated to repay creditors on a court-ordered plan. Since they have a regular income, Wage Earner payments are usually deducted from the debtor's paycheck to satisfy outstanding debts, which means extra paperwork and recordkeeping for the accounting department. Business owners don't always want to make concessions for individuals who bring personal problems like indebtedness on the job.
In addition, the effects of bankruptcy on employment opportunities can include psychological issues. The stigma of financial failure places a heavy burden on debtors in a society where monetary success is paramount and lack of material possessions relegates one to a lesser social status. Indebtedness and insolvency also cause undue emotional stress, which can impede an otherwise productive worker from performing at an acceptable level. Debtors experiencing emotional problems as a result of indebtedness should consult with Human Resources. Larger businesses and corporations usually have an employee assistance program designated to deal with personal issues that affect job performance.

So what can a job seeker do to counteract the effects of bankruptcy on employment opportunities? Consumers who have filed due to financial crisis need not be paranoid about every interview or potential for disclosure. Hundreds of thousands of people have experienced bankruptcy, but gradually bounced back. Approach a prospective employer with confidence, professionalism and a smile. During the interview, the focus should be on the applicant's skill level, job history and ability to perform. The first consideration on an employer's mind is, "Can this person do the job?" Applicants should spend time extolling virtues and not vices. Paint a picture of past workplace successes and superior abilities, and exude competence. A positive attitude and a determined demeanor, along with a job-winning resume, go a long way in convincing an interviewer that, in spite of any blemished credit report, they have the right person for the job!





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