Published on May 8th, 2014 | by Personal Rights0
What Happens During Bankruptcy
Whether it is a family member or friend, you know someone who has been affected by bankruptcy. Did you know that even the uber-rich real estate mogul Donald Trump has filed for bankruptcy — not just once but four times? If you have chapter 13 bankruptcy questions, contact a bankruptcy lawyer who can help you put your life back together, or start be more financially responsible.
There are two types of personal bankruptcy: Chapter 13 and Chapter 7. As much as 65% of all US consumer bankruptcy filings are Chapter 7 cases. Chapter 7 is a form of personal bankruptcy that is also known as liquidation. In this case, some of the debtor’s assets are turned over to a court-appointed trustee and are liquidated to pay on the outstanding debt. Chapter 13 is a rehabilitation with a payment plan for individuals with a regular source of income, enabling individuals with regular income to develop a plan to repay all or part of their debts.
Bankruptcy is often viewed as a “fresh start,” but it will not wipe out all of your debts. In Chapter 7, a debtor surrenders his or her non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to the debtor’s unsecured creditors. In Chapter 13, the debtor retains ownership and possession of all of his or her assets, but must devote some portion of his or her future income to repaying creditors, generally over a period of three to five years. Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits. A Bankruptcy Exemption defines the property a debtor may retain and preserve through bankruptcy.
With careful planning and financial management, it is possible to rebuild your credit after bankruptcy. If you are working, make sure to put a little bit of your paycheck over time. If you have money saved, it will be easier should you lose your job or have a medical expense. Filing for bankruptcy is inevitable for many people, but that does not have to be you. Save a little now so you will not pay later.
If you have chapter 13 bankruptcy questions, make sure to talk with a bankruptcy attorney. You do not have to file for bankruptcy if you are financially responsible. Do the little things right and you will be financially sound for several years. Read this for more.