Mar 08 2010
Getting To Know Basic Bankruptcy Information
Bankruptcy has become the last resort for many people who have been struggle with debt. This trend has increased with the instability of the economy and the rise of unemployment. If you find yourself considering bankruptcy because you can no longer deal with the burden of debt there are is bankruptcy information that you should familiarize yourself with. Getting to know the basics of bankruptcy will help you in making your decision
You may have heard a lot about this topic, but do not really know the fine details of it. Usually, bankruptcy consists of going through a court process that will help with reconciling your debt. This means that liquidation of your assets may occur in order to clear off debt. The state you live in will depend on which of your assets will be susceptible to liquidation; this is due to the fact that each state has its own policies regarding foreclosure. Although there are different forms of bankruptcy, two forms are the most typically used: Chapter 7 and Chapter 13 bankruptcy.
Opting for Chapter 7 will put you through the liquidation process. Once you have liquidized all assets that are applicable, the amount is put toward repaying debt. Where you live, and your state’s laws will factor in what assets the government has the right to liquidize.
On the other hand, Chapter 13 you do not go through a liquidation process but offer a repayment plan that will be enforced for 3-5 years. Both of these bankruptcy instances have different prerequisites and procedures. Thus, considering your options carefully will help you make the right choice for your circumstances.
In order to file for Chapter 7 you have to an individual (consumer) or a business. This process normally lasts 3-6 months for completion. Property liquidation is assessed, and whatever assets are eligible for liquidation under your state law will be sold in order to repay debt. Once this step is complete you will be exempt from repayment of unsecured debts such as credit cards, or medical bills.
In the case of secured debt, or collateral debt, like a car loan there are several actions that may take place. The lender may decide to repossess the vehicle. You may be able to work out a deal with the lender to keep your car. Or, you may be able to pay a lump sum of the resale value of the car. Any one of these options will be considered with the lender’s approval.
Filing for Chapter 7 may not be a viable option for you if you have a stable income. In this case you may have the option of filing for Chapter 13. Filing for this type of bankruptcy means that you will not liquidate any of your assets, but instead set up a repayment plan. This means that you have to repay at least portions of your debt. This form of bankruptcy may also save you from foreclosure or vehicle repossession.
Repaying debt is part of the Chapter 7 process. Creating a repayment plan is part of the process. If you are near foreclosure or repossession this process will help prevent both and work out an arrangement. Being aware of various bankruptcy information may seem daunting, but if you dig deeper this information may go a long way in helping you make the right choice.
To get the latest bankruptcy information online. There are many different websites giving ideas for Bankruptcy status
