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Old 01-10-2014, 02:14 AM
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Cool The bankruptcy basics




For those with no personal experience with filing for bankruptcy, the process can be an overwhelming and mystical thing. What most do know about bankruptcy is that it is a way for people to get rid of debts that they wouldnít be able to pay off otherwise. If you are struggling with debt and can see no possible way to repay it yourself, you may already be considering bankruptcy. Before you take that step however there are a few things you should know about bankruptcy to help you in arriving at that decision.

Thereís more than one type of bankruptcy

What many donít know is that there are several different types of bankruptcy. For individuals however, there are two basic types of bankruptcy. In a Chapter 7 bankruptcy (also called liquidation) a personís assets are liquidated (or sold off) in order to repay as much of the debt as possible. In exchange, much, if not all of the personís debt is discharged. The court will appoint a trustee to oversee the liquidation of property.

In a Chapter 13 bankruptcy, rather than have debts discharged, a personís debts are reorganized. In this type of bankruptcy, the person gets to keep their property but they must also have a source of income and agree to pay a portion of that income to creditors. Once a repayment plan is submitted and approved by the court, a trustee is appointed. The trustee is responsible for collecting payments from the debtor and making sure they are distributed among the creditors.

Other considerations

Contrary to popular belief, bankruptcy doesnít necessarily eliminate all debts. Some debts such as federal and state taxes, student loans, child support, alimony, and court fines cannot be eliminated through bankruptcy.

You wonít lose everything in bankruptcy. When filing for a Chapter 7 bankruptcy, not all your property will be liquidated. There are certain exemptions. The exemptions vary by state but generally, they allow you to keep property that you will need to recover financially after bankruptcy.

Another thing to keep in mind when filing for bankruptcy is that you can choose to reaffirm some debts. In other words, if you want to keep certain property, rather than having the debt owed on that property discharged, you can agree to continue paying off that debt after bankruptcy. Reaffirmed debts much be approved by the court.

Because everyoneís circumstances are different, a consultation with a bankruptcy attorney is recommended to discuss the particulars of your situation.

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Source:
boston.cbslocal.com/2014/01/06/personal-bankruptcy-the-basics/
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Old 01-10-2014, 07:58 AM
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Anyone who files for bankruptcy is stupid. Just default. The difference is that bankrupcy, because it is a court judgement, will stick on your credit report forever while a default disappears after 7 years. I know this for a fact as I have defaulted twice in my liftime and currently have a credit score of 790. You have to be tough guy to default since there are extremely skilled debt collectors who will call and hassle you. Don't even talk to them - you cannot possibly deal with them -- they are experts. Change your phone number and make sure it is unlisted or better yet, an Ooma or Magic Jack number. Make sure you never give your true work number on any credit application or these same rigers will be hassling your boss. Remember, credit card debt is unsecured debt which means they can't reposess anything you bought with credit cards. They may attempt to sue you but you have to be personally served papers and it is altogether unlikely.
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Old 01-10-2014, 08:00 AM
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Oh, and if you do decide to default and give your creditors the silent treatment, expect to get letters saying they will take 75%, then later 50% and finally 25% of the amount you owed to clear your account. The balance gets lower and lower as the creditors become more and more worried you will take the default route.
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Old 12-05-2017, 09:27 PM
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I am a new member of this forum. Many people are not aware about bankruptcy basics. In such cases, consultation with a bankruptcy attorney is necessary to discuss the particulars of bankruptcy.
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