Bankruptcy Information
*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. All entities with debt can go to federal bankruptcy court. Tons qualify for total debt elimination. Other people would rather repay some of what they owe. If you could would you liquidate what you own. Valuables that could not be covered by a federal exemption will go to auction to cover some of your debt. Liquidation always falls under chapter 7 filing. Some would rather reorganize what they owe. People can keep their property by making payments for 3 to 5 years. Choosing this option will pay off debt or a portion of it. Reorganization is the most frequent choice and it falls under a chapter 13 filing.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. The reason people choose to file a chapter 7 bankruptcy is to release most or all their debt. Any debt included in your discharge will not have to be repaid. If a lien holder won’t allow certain property to be discharged you will still be liable for that debt. Property held by a lien will be repossessed unless you make a payment every month. Creditors cannot try and collect a discharged debt. People who have extensive debt like unsecured credit cards, medical bills, or debt that they can no longer repay are good chapter 7 candidates.
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. The courts may order you to make payments towards your secured debts. Chapter 13 will allow you to keep your vehicle and home. Debtors can keep some property by making payments over time.
Do different states have different limits on how many times you can file a bankruptcy?
You can apply for another chapter 7 after 6 years. If you already filed a chapter 13 you can file again whenever you like. You will pay a total of $ 200 for your filing fee and noticing fee with a chapter 7 bankruptcy. The filing fee for chapter 13 is $ 155 and a you’ll pay a $ 30 noticing fee as well. When a joint petition for a husband and wife is filed the fees will not double.
Do I need to be present in all court dates?
Attending the 341 creditor meeting is mandatory. This is the time to meet your bankruptcy trustee and some creditors. 40 days after filing a proceeding will take place. Creditors and trustees many times will have questions about your financial situation at this meeting. Trustees and creditors have been known to file motions or adverse actions at this time. You’ll have the opportunity to dispute your debts at this time. You will be notified of any additional court dates in writing.
Will bankruptcy ruin my credit?
If you are severely behind on debt a bankruptcy will not make things much worse. You will be shocked at how bankruptcy will help you as opposed to causing you damage. Evidence of a bankruptcy stays on credit for 10 years. Bankruptcy will wipe out most of your debt leaving you in a position to apply and secure new credit. Lots of people just need a new start. A life time of bad debt stinks. After filing you can begin to make smart financial decisions. Regrettably lots of people were not taught how to use money responsibly. Handling money is a learned skill so if you or your parents were never taught then a future bankruptcy may happen. Its torture to be stuck with debt but you can find relief and make wiser choices in the future.
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