The following bankruptcy information has been designed to help consumers understand the basics of bankruptcy. If you are considering opting for bankruptcy as a way of getting out of financial trouble make sure you know the pros and cons of the process.
Bankruptcy Information
The first thing to remember if you’re considering filing for bankruptcy is that it should not be your first choice. A bankruptcy can have serious negative impacts on your financial future and well-being of your family. Most people are not aware that bankruptcy information remains on your credit report for several years.
A Chapter 13 bankruptcy will remain on your credit record for six years. A Chapter 7 bankruptcy will reflect for ten years. This can make it difficult or even impossible to get credit for a home, car or education. If you are thinking about filing for either form it is important to understand the following bankruptcy information.
Let’s take a closer look at the two forms of personal bankruptcy. Make sure you understand this bankruptcy information before filing. A Chapter 13 or “reorganization” bankruptcy is filed in a federal bankruptcy court. A fee must be paid for the filing and you will also be liable for attorney fees.
If you file for this type of bankruptcy and have some form of income and limited debt you will be allowed to keep your assets. These include your home and car. Under Chapter 13, you must enter into a repayment plan that the court has approved. This repayment plan will last from three to five years. Before filing for Chapter 13 make sure you understand this important bankruptcy information as it pertains to you..
A Chapter 7 bankruptcy is also called a liquidation bankruptcy. Here all assets that are not exempt are sold to repay your debts. Assets that might be exempt include cars, work-related tools and some household furnishings. Ask your attorney for bankruptcy information relative to these assets before you file. Property can be sold by a court-appointed official or a trustee or it might be handed over to creditors. You can only file for Chapter 7 once every six years.
What are the pros and cons of both types of bankruptcy? Both Chapter 13 and Chapter 7 bankruptcy can discharge unsecured debts. They can also halt foreclosures, repossessions, garnishments, prevent your utilities from being stopped and stop all efforts at debt collection by your creditors (no more phone calls!). Be sure to ask your attorney for the correct bankruptcy information for your state.
Both Chapter 7 and Chapter 13 can also make allowances for exemptions that help you keep certain assets. Again, ask your attorney for bankruptcy information that pertains to your state. They won’t, however, discharge child support, alimony, fines, taxes, and some student loan obligations. These obligations will still have to be met. You typically cannot keep property if your creditor has an unpaid mortgage or lien on it.
Read the next paragraph carefully, it’s an important piece of bankruptcy information! Any co-signor on a debt will become liable a co-signed debt. If this is going to be problem for a family member of spouse don’t file for bankruptcy. You won’t be allowed to claim any credit debts that are recent. So you won’t be able to take a holiday and then file for bankruptcy!
