Important Information Involving Bankruptcy
Bankruptcy is referred to as a reorganization or liquidation process. Bankruptcy motions happen in federal court to eliminate debt for people and businesses. You can qualify for total debt elimination. The other option will let you pay back some of what you owe. You have the option to liquidate your property. Property not covered by an exemption can be sold to cover some of your debts. Liquidation lies under chapter 7 filing. Some decide they would rather reorganize their debt. You can still keep what you own by making payment on debt for 3 to 5 years. This selection pays most of or all remaining debt. The most popular choice is a reorganization filed under a chapter 13 bankruptcy.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. You can release all debt with a chapter 7 bankruptcy. If a petition is accepted the debtor is no longer required to make payments on discharged debts. Sometimes people get stuck with property that is held out of discharge by a valid lien. Property held by a lien will be repossessed unless you make a payment every month. Your debt is as good as gone after a discharge is complete. If your 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 advantages of chapter 13 is you can keep your home and car. This will allow you to keep property that you owe money to and it will take care of the stuff not covered by your exemption. You will have some debt that you will still have to pay off. To keep your home or car you may want to file a chapter 13 bankruptcy. You can make payments towards past due secured debt keeping what you own.
What is the limit on bankruptcies?
You can file as many chapter 7 bankruptcies as you want as long as you wait 6 years between each one. You can file chapter 13 again and again. For a chapter 7 bankruptcy you can expect to pay a $ 170 filing fee and a $ 30 noticing fee. A $ 30 noticing fee and $ 155 filing fee will be imposed. A husband and wife may file a joint petition and the fee will stay the same.
Do some people go to court?
One step towards finalization will be a proceeding called a meeting of creditors or a 341 meeting you must attend. You will be joined by creditors and a bankruptcy trustee. Once filing is complete you'll be sent a notice to meet in about 40 days. At this gathering you may be asked about your debt. Motions and adverse actions get filed at this time. Remember you can dispute some debts at this time. If additional court dates are necessary you will be sent a notice to attend.
What can I expect after filing bankruptcy?
Your debt has hurt you much more than a bankruptcy ever will. Bankruptcy is in fact less damaging than a life of unpaid debt. Bankruptcy will show on your credit report for 10 years. A bankruptcy will clear up most or all your bad debt then many creditor will send you new applications to rebuild your credit score. At times people just need a fresh start. Living most your life with bad debt trailing your every move is not a fun situation. You can start to make wise financial decisions after you file. The required skills needed to handle money have not been taught to most people. Not learning money basic as a youth or even losing your job can cause future problems like bankruptcy. Your future can be bright as long as you make smart money moves.
Tags: bankruptcy, chapter 11 bankruptcy, chapter 7 bankruptcy