Things You Should About Bankruptcy
*Note: This article is not legal advice, it is a personal opinion based on experience from the author. If you are seeking legal advice please check with your local bankruptcy attorney.
Bankruptcy is referred to as a reorganization or liquidation process. Bankruptcy happens in federal court for those people and businesses with lots of debt. People want to qualify for total debt elimination. The other option will let you pay back some of what you owe. Some are glad to liquidate their property. Some of what you own can then be sold at auction to pay a portion of what you owe. Liquidation falls under chapter 7 filing. If you would rather keep valuables consider a reorganization of your debt. This allows people to keep all their property on the condition that payments will be made for 3 to 5 years. You can pay off debt or a portion of it with this option. A chapter 13 filing works best for most people because they can reorganize debt.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. You can release all personal liability for the debt you owe with a chapter 7 bankruptcy. If a petition is accepted the debtor is no longer required to make payments on discharged debts. A discharge cleans up most debt but it won’t clear up anything held by a lien holder. Property held by a lien will be repossessed unless you make a payment every month. When debts are discharged creditors will leave you alone. 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. You can keep your car or home with a chapter 13 bankruptcy. Included are property with past due balances and equity that your exemption did not cover. You will want to make monthly payments towards your secured debts and even pay extra to get caught up on past due obligations. To keep your home or car you may want to file a chapter 13 bankruptcy. You can keep what you owe by making payments towards secured debt.
What is the limit of bankruptcy filings?
Just wait 6 years from your last filing then you can file another chapter 7 bankruptcy. You can file chapter 13 an unlimited number of times. Two hundred dollars is nothing to pay for a chapter 7 bankruptcy. Chapter 13 requires a $ 30 noticing fee and a $ 155 filing fee. Joint petitions for a husband and wife won’t change the fee.
Will I have many legal appointments to attend?
You will attend a meeting of creditors sometimes called a 341 meeting. This is the time to meet your bankruptcy trustee and some creditors. This event can happen as early as 40 days from filing. Your financial state will be discussed at this meeting. Adverse actions and motions may be filed at this time. You may dispute your debts at this time. If additional court dates are necessary you will be sent a notice to attend.
Will bankruptcy ruin my credit?
Filing bankruptcy will hurt less than the debt you already have. Bankruptcy is in fact less damaging than a life of unpaid debt. Your credit report will show a bankruptcy for 10 years. After bankruptcy you will be a very popular candidate for new credit even if they say that your credit score will be affected for 10 years. Some just need a fresh start. Living most your life with bad debt trailing your every move is not a fun situation. You will be more aware of how to handle money. Many people have not been taught the necessary skills required to handle money. Bankruptcy does not discriminate many people start off on the wrong foot others have a sudden loss of income. Its torture to be stuck with debt but you can find relief and make wiser choices in the future.