Despite the fear and misconceptions surrounding bankruptcy, many people find it to be a legitimate way of getting rid of their debts. Still, many people wonder about what will become of their assets if they declare bankruptcy. This concern is quite understandable, so we need to understand the basic forms of bankruptcy.
In chapter seven bankruptcy, your aim is to discharge, or wipe out, your debts completely. The downside, however, is that you may have to forfeit some of your assets in order to pay off at least part of your debt.
In chapter 13 bankruptcy, your debts are not done away with. Instead, you work out a payment plan in which you will pay part or all of your debt (usually within 3 to 5 years). The advantage is that you don't have to give up your assets to help pay your creditors.
As you can see, chapter seven would be the choice for most people who are trying to get rid of their debt. However, chapter 13 can be useful in certain cases such as trying to get caught up with your mortgage payments.
Of course, if you're filing for bankruptcy, then you may not have many assets to speak of. In fact, in virtually all cases, no assets are forfeited for one of two reasons. Either the consumer doesn't have any assets to sell, or they just aren't worth enough to bother with.
Most people are mainly concerned with two common assets: the house and the car. In most cases, you're covered to a certain extent by a homestead exemption. The details vary by state, and this also depends on how much your house is worth and how much you still owe on it.
You should realize that finding a good bankruptcy attorney is essential to help you file bankruptcy successfully. There are just too many details for you to try to figure everything out on your own.
That doesn't mean that you shouldn't try to learn as much as possible before consulting your lawyer. You should continue to find articles like these because an informed client will make things easier for the lawyer, which can end up saving money in the long run.
In chapter seven bankruptcy, your aim is to discharge, or wipe out, your debts completely. The downside, however, is that you may have to forfeit some of your assets in order to pay off at least part of your debt.
In chapter 13 bankruptcy, your debts are not done away with. Instead, you work out a payment plan in which you will pay part or all of your debt (usually within 3 to 5 years). The advantage is that you don't have to give up your assets to help pay your creditors.
As you can see, chapter seven would be the choice for most people who are trying to get rid of their debt. However, chapter 13 can be useful in certain cases such as trying to get caught up with your mortgage payments.
Of course, if you're filing for bankruptcy, then you may not have many assets to speak of. In fact, in virtually all cases, no assets are forfeited for one of two reasons. Either the consumer doesn't have any assets to sell, or they just aren't worth enough to bother with.
Most people are mainly concerned with two common assets: the house and the car. In most cases, you're covered to a certain extent by a homestead exemption. The details vary by state, and this also depends on how much your house is worth and how much you still owe on it.
You should realize that finding a good bankruptcy attorney is essential to help you file bankruptcy successfully. There are just too many details for you to try to figure everything out on your own.
That doesn't mean that you shouldn't try to learn as much as possible before consulting your lawyer. You should continue to find articles like these because an informed client will make things easier for the lawyer, which can end up saving money in the long run.
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Don't let the fear of your debt take over your life. Get the facts about bankruptcy and learn how to get control of your debt. To learn more about what is the new bankruptcy law visit us at http://personalbankruptcyquestions.org
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