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Bankruptcy and Debt

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โˆ™ 2010-11-08 22:31:46

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If you have a mountain of debt that will force you to file for bankruptcy, there are two types of protection that you can file for with the bankruptcy courts. The first kind of bankruptcy protection is called chapter 7 bankruptcy. Under chapter 7 bankruptcy, your assets will be liquidated and the proceeds from the sales will go towards paying off your debts. Most remaining debts will then be discharged by the courts. The second kind of bankruptcy that you can file for is called chapter 13 bankruptcy. Chapter 13 bankruptcy is more closely related to debt consolidation in that your debts are reorganized and a payment plan is set up between you and your creditors.

Chapter 13 bankruptcy is sometimes called a working man's bankruptcy because one of the requirements of filing for the protection is having a job with a steady income. In a chapter 13 bankruptcy filing, you and your lawyer will devise a payment repayment plan that explains to the courts how you will handle your creditors. Most payment plans allow you to make payments for a period between 30 and 60 months after the initial filing. According to current bankruptcy laws, the debtor must prove to the courts that he will be able to carry out the plan for the duration of the time period. Current chapter 13 bankruptcy laws give judges the ability to factor in your living expenses while repaying your debt. However, federal standards are in place that makes it difficult for judges to customize expenditures on a case to case basis.

Chapter 13 bankruptcy can also be a punishment for those that have file for chapter 7 bankruptcy fraudulently. Many people prefer to file for chapter 7 bankruptcy because they will not have to repay most of their debts. However, not everyone qualifies for this kind of protection. In order to qualify for chapter 7 bankruptcy, a person must make no more than $167 over the median income of the state. If the courts find out that a person does violate this requirement, the chapter 7 protection can be revoked and changed to chapter 13.

Most people that file for chapter 13 bankruptcy will also be required to attend classes that will teach them about money management and Personal Finance. If you fail to attend the classes or do not pass, your bankruptcy may be revoked, which will erase any protection that you were granted from your creditors.

The laws surrounding chapter 13 bankruptcy are quite complex. Should you ever have to file for bankruptcy, hire a bankruptcy attorney who can guide you through the process. Even though your finances may be tight, hiring a bankruptcy lawyer can save you time and make sure that your interests are protected in the wake of your looming bankruptcy.

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โˆ™ 2010-11-08 22:31:46
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Q: Bankruptcy and Debt
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Are you liable for debt cancelled in bankruptcy?

No you are not, If you deglared bankruptcy, that cancels your debt


Where can one get help for credit card debt bankruptcy?

There are many places where one can get help for credit and debt bankruptcy. For example, Debt Advisors Scotland, Consumer Information and Total Bankruptcy.


Will you get a 1099 for debt discharged in Chap 7 bankruptcy?

No. Unlike some non-bankruptcy situations, debt wiped out in bankruptcy (any chapter) is NOT income to the debtor.


Are all debts automatically discharge in chapter 7 bankruptcy for a bankruptcy that occurred in 1988?

If a debt was listed on a Bankruptcy that you filed and the Bankruptcy went through then that debt is permanently discharged with a Chapter 7.


Can you claim bankruptcy on IRS debt?

Filing for bankruptcy is one of five ways to get out of tax debt, but you should consider bankruptcy only if you meet the requirements for discharging your taxes.


What debt will bankruptcy not erase?

Bad check debt filed with the state.


Can a judgment be put on your credit if the debt was part of the bankruptcy?

Not if the debt was discharged in the bankruptcy. If the judgment was on the credit report before the bankruptcy was filed and/or was discharged in the bankruptcy, the entry will still remain on the CR for seven years.


Can you file bankruptcy on a truck repo past due loan?

No, if you mean, can you single out this debt to "file bankruptcy on." You file bankruptcy on ALL your creditors. You don't get to pick and choose. But you can certainly include such a debt in bankruptcy.


What is the difference between debt settlement vs bankruptcy?

There is a subtle difference between debt settlement and bankruptcy. Debt settlement allows a person to pay off some of their debt with their creditors. Bankruptcy claims do not result in payment of the debt. Either practice creates bad credit scores for the consumer.


What are the different types of bankruptcy?

There are five different types of bankruptcy including individual bankruptcy for liquidation or debt, farming bankruptcy, municipal bankruptcy, and corporation bankruptcy.


What happens to a judgment lien in a bankruptcy?

If the bankruptcy is discharged you are no longer responsible for the debt.


Can a cosigner put the debt that they cosigned for under bankruptcy to release them from the debt if the debt is not in default?

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