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.
Reorganization or liquidation process is what bankruptcy is referred to. Federal court handles bankruptcies for people and businesses with debt. Some people qualify for total debt elimination. Instead some repay some of what they owe. Some are glad to liquidate their property. The courts may order you to let them sell none exempt assets to pay a portion of the debt. 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. Most or all your debt gets paid with this option. Many Americans opt for a chapter 13 reorganization.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. You can rid yourself of the debt you owe with a chapter 7 bankruptcy. If a case is granted then the debtor is no longer required to pay any debts that get discharged. Sometimes people get stuck with property that is held out of discharge by a valid lien. With a debt held by a lien you must pay up or return the property. After a discharge creditors may not try to collect or communicate with a debtor about a debt. Consumers who have way too much debt that cannot be repaid are good candidates for 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 is valuable items with a balance and equity your federal exemption won’t cover. You will be forced to make monthly payments towards your secured debts and even pay extra to get caught up on past due obligations. A chapter 13 bankruptcy allows you to keep your house and car. Debtors can make payments over time on secured debts.
Does the federal court allow more than one bankruptcy?
Some people will file chapter 7 bankruptcy every 6 years. File a chapter 13 once or a hundred times it’s up to you. Surprisingly chapter 7 only costs $ 200. There will be a $ 30 noticing fee as well as a $ 155 filing fee. When a joint petition for a husband and wife is filed the fees will not double.
Is court unavoidable?
One meeting you have to attend is called a meeting of creditors. You will meet the bankruptcy trustee and some creditors. After you file expect to have a proceeding in 40 days or so. At this meeting you will be asked a few questions about your financial situation. Creditors and trustees who want to file a motion can at this time. If you need to dispute any debts this would be where you would petition for it. Federal bankruptcy courts will send you a notice to appear if additional hearings are required.
Will I regret filing bankruptcy?
If severely in debt a bankruptcy will not affect your life much. Unpaid debt is far worse than a bankruptcy. Recovery from a bankruptcy will take 10 years. Rebuilding your credit is easy after bankruptcy cleans your credit report. Lots of people just need a fresh start. A life time of bad debt stinks. After you file bankruptcy you will want to make wise money decisions. It’s a sad reality that many have no clue how to handle money properly. Bankruptcy does not discriminate many people start off on the wrong foot others have a sudden loss of income. You never have to be in debt again just learn from your past.
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