Reorganization or liquidation process is what bankruptcy is referred to. Bankruptcy is finished in federal court to erase the debt that people or businesses have. People want to qualify for total debt elimination. You can pay off some of what you owe instead. Some choose to liquidate what they own. A portion of your debt will be paid by selling assets not covered by your exemptions. Liquidation falls under the chapter 7 filing option. A majority of people would rather reorganize their debt. This lets people keep all their valuables with the condition that payments can be made for 3 to 5 years. This selection pays most of or all remaining debt. The most accepted choice is chapter 13 so you can reorganize your debts.
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. All debts that get discharged will not have to be repaid. When property is secured by a lien it won’t be included in your discharge. Cases concerning property held by a lien will need to be paid or risk losing your property. Your debt is as good as gone after a discharge is complete. 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. If you want to keep your car and home file a chapter 13 bankruptcy. Included are valuable items with a balance and equity your federal exemption won’t cover. Many pay extra on their monthly payments for secured debt. A chapter 13 bankruptcy allows you to keep your house and car. You will be able to keep certain secured debt by making payments over time.
Do different states have different limits on how many times you can file a bankruptcy?
You cannot file chapter 7 again till 6 years have lapsed since your last filing. File a chapter 13 once or a hundred times it’s up to you. Chapter 7 bankruptcy is not too expensive you only pay two hundred dollars. A $ 155 filing fee and a $ 30 noticing fee will need to be paid. The fee will always stay the same even when a husband and wife file together.
Will I have many court dates to attend?
If you want to file you must attend a proceeding called a meeting of creditors or a 341 meeting. 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. You will be asked some questions about your financial issues at this meet. You could be subject to a motion or adverse action at this time by creditors or the trustee. You’ll have the opportunity to dispute your debts at this time. If more than one hearing is required you will be sent a letter by mail.
Will bankruptcy ruin my credit?
When severely in debt a bankruptcy won’t hurt you much more. Unpaid debt is far worse than a bankruptcy. Recovery from a bankruptcy will take 10 years. I knew a lady who filed bankruptcy and after it was done she was able to secure credit for a new home. Lots of people just need a new start. Many die leaving a mountain of debt. After filing you can begin to make smart financial decisions. It’s a sad reality that many have no clue how to handle money properly. It’s not always your fault when you fall behind into debt some lose their income and others gain debt through divorce. Learning from your past of bad debt is half the battle.
