How to file for personal bankruptcy and the many related questions will be explained. Also, the increasing number of medical and student loan bankruptcies are discussed.
Declaring personal bankruptcy is not a cure for financial problems. In fact, it may be the wrong move for many. The topic is involved and complicated. Therefore, an experienced attorney with an understanding of bankruptcy law should be consulted.
Because declaring bankruptcy is a federal law, handled in federal court, it is uniform throughout the United States. It is a legal proceeding for a person who cannot pay their bills. Timing is an important ingredient for several reasons.
Disclaimer: This website does not provide legal advice. Its sole purpose is to provide information. Contact your attorney for legal advice.
This is often referred to as "straight bankruptcy" or "liquidation". It is quicker and eliminates debt. But, some property could be confiscated and sold with the revenue going to the creditors.
While it doesn't eliminate mortgage and car payments, it will allow you keep your home and car if the value does not exceed the exemption amount. You will be allowed to keep your personal possessions.
You can also keep some cash and will not lose welfare or Social Security benefits. Not all who file for Chapter 7 bankruptcy become eligible for it. If funds are available to fund a Chapter 13 bankruptcy, that may be your only option. (See above for other benefits.)
Reorganization or the "wage earners" plan are common names for this. This type of bankruptcy is often used by businesses (Chapter 11) that are dealing with hard times. People who want to keep their home or car and are behind in payments can often benefit from this.
Property is not lost and a repayment plan, that the court approves, is implemented. Unfortunately, most of these filers do not complete their repayment programs, even though a percentage of the debt is eliminated and the payment schedule is lengthen.
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