Information on Bankruptcy

Bankruptcy is referred to as a reorganization or liquidation process. All entities with debt can go to federal bankruptcy court. If you qualify take advantage of total debt elimination. You can choose to repay some of what you owe. Some decide to liquidate their property. The courts may order you to let them sell none exempt assets to pay a portion of the debt. In order to liquidate, file for chapter 7. Lots of people would reorganize their debt. With the condition that monthly payments will be made for 3 to 5 years a person can keep their property. This selection pays most of or all remaining debt. Reorganization is a part of chapter 13 and is the most popular choice.

Chapter 7 bankruptcy

If you file for bankruptcy you are known as the debtor. You can release all debt with a chapter 7 bankruptcy. Debt included in a discharge will not need to be repaid. Many times people have property not eligible for a discharge because of a secured creditor's lien. If you don’t want you property to be repossessed you must make payments to the lien holder. When your bankruptcy is discharged creditor won't harass you by phone or mail. If you're burdened with unsecured debt that is way too much to handle a chapter 7 bankruptcy will work best.

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 best part of a chapter 13 bankruptcy is you can keep your car and home. This process includes equity not held under the exemption and other items of value that you may hold a negative balance on. You will be required to make monthly payments towards your secured debts even paying extra to get caught up on past due bills. If you want to keep your car and home file a chapter 13 bankruptcy. A debtor will also be allowed to make payments towards past due secured debts to keep what they own over a span of time.

Can I only file bankruptcy one time?

Just wait 6 years from your last filing then you can file another chapter 7 bankruptcy. There is no limit to the time you may file a chapter 13. Surprisingly chapter 7 only costs $ 200. There will be a $ 30 noticing fee as well as a $ 155 filing fee. The fee will never change when a husband and wife file a petition together.

Do some people go to court?

You will attend a proceeding called a meeting of creditors or a 341 meeting. You will meet face to face with the creditors who show up and a with a bankruptcy trustee. Expect proceedings to take place 40 days after a bankruptcy is filed. At this conference some creditor or trustees may inquire about your financial state. Some creditors or trustees will file a motion or adversary action at this time. You may dispute your debts at this time. If more than one hearing is required you will be sent a letter by mail.

What can I expect after filing bankruptcy?

Filing bankruptcy will hurt less than the debt you already have. You will be shocked at how bankruptcy will help you as opposed to causing you damage. Be aware that a bankruptcy will remain on credit report 10 years. Bankruptcy is a fresh start without all your old debt you can rebuild your credit and fast. A lot of individuals need a fresh start. Living life with bad debt is no life at all. After filing you can begin to make smart financial decisions. Proper money handling is a skill not taught to many Americans. Bankruptcy does not discriminate many people start off on the wrong foot others have a sudden loss of income. It's not fun to be in debt but you can find relief and vow to make smarter decisions in the future.