Spotlight On Bankruptcy Options For Individuals

Mar 25th, 2014 | By | Category: Debt

Bankruptcy is a very complex process. It is very likely that you’ll have questions. The following are some likely bankruptcy questions you may have when approaching bankruptcy and hopefully it’ll help you out.

Bankruptcy should be permitted only when absolutely necessary. Lawyers and other such people may say differently. However, bankruptcy isn’t the only way out. It should be made available for the most extreme situations such as when the debt arose out of no fault of your own, or there are unexpected reasons why you cannot pay it off.

If you have wracked up credit card debt and are still charging, you need a lot more than just bankruptcy. If you declare bankruptcy, chances are when you go back to your regular life, you will go back to your poor spending habits and continue building up more debt.

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Bankruptcy, in most circumstances, can completely wash the slate of credit card debt and other unsecured debt. And, because of bankruptcy exemptions, the majority of people don’t surrender any of their assets in bankruptcy.

In some situations, bankruptcy is the better choice. You need to think carefully about your situation before going through with it and talk with a financial professional if necessary about your options.

There are many more than 2 chapters, but most of the remaining chapters are for businesses, corporations, farms, etc. You will either file chapter 7 or chapter 13 bankruptcy, for individuals.

This is a good bankruptcy question because most people believe when they declare bankruptcy, they’ll get all their debt wiped away and they can start fresh. That isn’t necessarily true. Most likely, they’ll get some kind of help, although not necessarily in that way.

Once you’ve decided that you need to file for bankruptcy, you must decide as to what type of bankruptcy you need to file for. The most typical types of bankruptcy for people are a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy. With a Chapter 7 Bankruptcy, you’ll find that it will wipe your debt clean, with some limited exceptions, and it will also grant you an immediate fresh start. In a Chapter 13 Bankruptcy, you’ll be necessary to make payments for three to 5 years to be able to achieve your discharge. Make sure you talk to a qualified bankruptcy attorney, with a view to see which bankruptcy chapter is right for you.

Bankruptcy should be a last option. However, you don’t want to delay filing for too long believing that there’ll be some type of miraculous turn around. Just be sure you have evaluated your financial position from a realistic perspective. Speaking to a bankruptcy attorney sooner, instead of later, is a good option as a bankruptcy attorney can tell you rather quickly if filing for bankruptcy is not your best option. A qualified bankruptcy attorney can also let you know what options that you may still have available to you and where you can go to obtain help if you don’t file for bankruptcy.

Chapter 7 bankruptcy is the settlement of debt. This means that most of the debt will be discharged. Discharged means you’ll not need to repay the debts. Once the debts have been discharged, creditors have 60 days to object to the decision, and after that it’s final.

Chapter 7 is much harder to file and much less common. You have to send in a petition. However, you may be refused and forced to file chapter 13. Whichever you end up filing, your trustee will endeavour to decide what assets you need to liquidate to pay some debt and which will be discharged. It is decided on an individual basis.

This bankruptcy question may find out if you even file for bankruptcy at all. If you’re filing chapter 13, it is likely that any of your debts will be discharged. Even if you’re filing chapter 7, no all your debts will be discharged. Your trustee will first decide which of your assets are in a position to be liquidated. If there are any, they’ll have you liquidate them and use that money to pay at least part of the debt.

The most popular bankruptcy filing is Chapter 7. This allows the person to delete much of their debt. Chapter 7 bankruptcy usually takes 3 months. If filing a Chapter 7 bankruptcy please note it will reflect on their credit score for 10 years. Also, Chapter 7 bankruptcy doesn’t mean all debt will be discharged. Things like most student loans, child support, and any taxes (federal, state and local) owed will need to be paid by you.

Most people know nothing of Chapter 9 bankruptcy. Chapter 9 bankruptcy calls for the solution of municipal debts. Only a handful of municipalities have ever filed Chapter 9 since it was first made into law in 1937. In 1994, Orange County, California filed a multi-million dollar Chapter 9 because the County Treasurer-Tax Collector misappropriated the county’s tax dollars. He left the entire county bankrupt and ended up in gaol. This case personally affected me as I lived there and worked with the County of Orange at the time.

It is possible to declare bankruptcy without a lawyer. It will be cheaper, but not necessarily easier. A bankruptcy lawyer will know the process and will be in a position to help you through it a lot. They will help you organize your debt and track where you owe creditors. They will help you through the meeting of creditors when creditors ask you questions to help ensure that you’re being honest. Basically, a lawyer is invaluable in the case unless you see what you’re doing.

Once you have sent in the petition for bankruptcy, you get automatic stay. This means that creditors aren’t allowed to call you. This is a vast relief, for many people. If they need to contact anyone, it needs to be your lawyer. If you’re declaring bankruptcy for the second time, you may or may not necessarily be granted automatic stay.

When you file for bankruptcy and send in your petition, you’re given a trustee.  This trustee is under the responsibility of your case.  They are present at the meeting of creditors and they’re in charge of making the majority of the decisions.  They will go over your situation and your debt and assets.  They will determine which of your assets you’ll need to liquidate to pay debt and they’ll find a reorganization plan in the case that you file chapter 13 bankruptcy.

This is another common bankruptcy question and a common fear among those looking to declare bankruptcy.  A bankruptcy will stay on your record and credit score for the 10 years after you file.  Ten years is still a long time. However, it isn’t forever and gives a degree of hope to people.  After you have been through the whole process, it is going to take some work to repair your credit and get your money back in order.  I recommend seriously looking over your finances and learning how to properly and effectively manage your money so you avoid this situation new in the future.


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