Bankruptcy is referred to as a reorganization or liquidation process. Bankruptcy motions happen in federal court to eliminate debt for people and businesses. You too can qualify for total debt elimination. Other people would rather repay some of what they owe. Many liquidate their property. This means assets not covered by exemption will be sold to pay down some debt. Chapter 7 lets you liquidate assets. Some decide they would rather reorganize their debt. With the condition that monthly payments will be made for 3 to 5 years a person can keep their property. Most or all your debt gets paid with this option. Many people choose a chapter 13 filing so they can reorganize their debt.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. If your debt is out of control an option for you could be a chapter 7 bankruptcy. All debts that get discharged 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. In a lien situation you are still responsible to pay the debt to the secured creditor or be forced to release the property to the lien holder. When debts are discharged creditors will leave you alone. 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. The advantages of chapter 13 is you can keep your home and car. This process includes equity not held under the exemption and other items of value that you may hold a negative balance on. The courts may order you to make payments towards your secured debts. The advantages of chapter 13 is you can keep your car and home. A debtor can make payments for secured debt keeping what they own.
Can I file bankruptcy more than once?
Some people will file chapter 7 bankruptcy every 6 years. File a chapter 13 once or a hundred times it’s up to you. For a chapter 7 bankruptcy you can expect to pay a $ 170 filing fee and a $ 30 noticing fee. The filing fee for chapter 13 is $ 155 and you’ll pay a $ 30 noticing fee as well. A husband and wife may file together and the fee will never change.
How many court dates must I attend?
One meeting you have to attend is called a meeting of creditors. Creditors may choose to attend along with a bankruptcy trustee. You will have a meeting around 40 days after filing. Your financial state will be discussed at this meeting. At this meeting a motion or adverse action can be filed. Many people will dispute their debts at this time. If another hearing is required you will be sent notice in the mail.
Is bankruptcy worth the credit risk?
Filing bankruptcy has little effect on those with horrible debt. Unpaid debt is far worse than a bankruptcy. Evidence of a bankruptcy stays on credit for 10 years. After bankruptcy you will be a very popular candidate for new credit even if they say that your credit score will be affected for 10 years. A lot of individuals need a fresh start. A life time of bad debt stinks. Use this opportunity to manage money better. Many people were never taught how to handle money. It’s not always your fault when you fall behind into debt some lose their income and others gain debt through divorce. From here on out good financial decisions can be made.
