Bankruptcy: What you Should Know

Bankruptcy is referred to as a reorganization or liquidation process. You can eliminate your debt whether its personal or of a business nature in federal bankruptcy court. Tons qualify for total debt elimination. You can choose to repay some of what you owe. An option for many is a liquidation of assets. None exempt items can be sold to pay a portion of your debt. You can liquidate with a chapter 7 bankruptcy. A number of people would rather reorganize their debt. With the condition that monthly payments will be made for 3 to 5 years a person can keep their property. Choosing this option will pay off debt or a portion of it. Many people choose a chapter 13 filing so they can reorganize their debt.

Chapter 7 bankruptcy

If you file for bankruptcy you are known as the debtor. The point of a chapter 7 bankruptcy is to eliminate most all your debt. Any debt included in your discharge will not have to be repaid. Bankruptcy eliminates most debt except debt held by a lien holder. Property held by a lien will be repossessed unless you make a payment every month. Debts included in a discharge cannot be perused by creditors. People with a lot of old debt and who are low income should file for a chapter 7 bankruptcy.

Chapter 13 bankruptcy

For chapter 13 bankruptcy a debtor will file a payment plan with the federal courts to pay back some or all the debts that they owe, over a three to five year period. The advantages of chapter 13 is you can keep your home and car. Exemptions doesn't always cover everything but you will be able to keep what’s not covered plus any other property you may owe on. You will be forced to make monthly payments towards your secured debts and even pay extra to get caught up on past due obligations. Chapter 13 will allow you to keep your vehicle and home. If you want to keep some of what you own you can continue to make payments only if its secured debt.

How many years must I wait to file bankruptcy again?

Some people will file chapter 7 bankruptcy every 6 years. File a chapter 13 once or a hundred times it’s up to you. For a chapter 7 bankruptcy you will pay a $ 170 filing fee and a $ 30 noticing fee. Chapter 13 requires a $ 30 noticing fee and a $ 155 filing fee. The fees stay the same even if filing a joint petition with a husband or wife.

Do you have to show up for court?

One step towards finalization will be a proceeding called a meeting of creditors or a 341 meeting you must attend. A bankruptcy trustee and many others may attend. This meeting will happen about 40 days from your filing. You will be asked some questions about your financial issues at this meet. Creditors and trustees have the right to file a motion or adverse action at this time. Many debtors dispute debts at this time. If more than one hearing is required you will be sent a letter by mail.

Will I regret filing bankruptcy?

Your debt has hurt you much more than a bankruptcy ever will. Unpaid debt is far worse than a bankruptcy. Bankruptcy will show on your credit report for 10 years. Bankruptcy may actually be better for some because after being in bad credit trouble for so long you will finally be eligible for new credit you once could not get. Sometimes a person just needs a fresh start. Bad debt can hurt the ones you love. You have learned a valuable lesson on money you can now be a wise spender. Regrettably lots of people were not taught how to use money responsibly. Not learning money basic as a youth or even losing your job can cause future problems like bankruptcy. It’s not a good feeling to be in debt but you can now make the right money choices.

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Originally posted 2010-01-27 20:42:09. Republished by Blog Post Promoter

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