Bankruptcy Information

Reorganization or liquidation process is what bankruptcy is referred to. 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. Some are glad to liquidate their property. Some of the debt can be paid by selling your none exempt assets. Liquidation lies under chapter 7 filing. If you would rather keep valuables consider a reorganization of your debt. A person can keep all their belongings with the condition that monthly payments will be made for 3 or 5 years. Most or all debt will be cleared with this choice. 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. The reason people file chapter 7 bankruptcy is to discharge all their debt. You won’t have to repay any discharged debts after a petition is final. A discharge wipes away most debt except for some items held under a lien. Property held by a lien will be repossessed unless you make a payment every month. 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. The benefits of a chapter 13 bankruptcy are that a debtor can keep their personal property like a vehicle or home. Included are valuable items that are past due also equity not covered by the exemption. You will want to make monthly payments towards your secured debts and even pay extra to get caught up on past due obligations. You could lose your house or car unless you file a chapter 13 bankruptcy. Debtors can make payments over time on secured debts.

Is bankruptcy a onetime benefit?

You can apply for another chapter 7 after 6 years. Chapter 13 filing has no filing limits. Surprisingly chapter 7 only costs $ 200. Chapter 13 requires a $ 155 filing fee and a $ 30 noticing fee. Filing fees stay the same even if it’s a joint petition for a husband and wife.

Will I be required to go to court?

A debtor is only required to attend a proceeding called a meeting of creditors or a 341 meeting. A bankruptcy trustee and many others may attend. This meeting will happen about 40 days from your filing. At this event your finances may be brought up. Be aware that trustees and or creditor may file a motion or adverse action at this time. Many people will dispute their debts at this time. If you must have another hearing notice will be sent via mail.

Is bankruptcy an unwise decision?

If you are severely behind on debt a bankruptcy will not make things much worse. Unpaid debt is far worse than a bankruptcy. Evidence of a bankruptcy stays on credit 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. A lot of people would benefit from a fresh start. If you’ve been in debt forever you feel helpless. Use this opportunity to manage money better. Many people were never taught how to handle money. Many people were not taught how to handle money mainly because they never had money or they grew up with parents who were never taught. It’s not fun to be in debt but you can find relief and vow to make smarter decisions in the future.

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