Got Debt? Is Bankruptcy the Solution?
Will our debts be canceled in bankruptcy?
It depends on the type of debt you might have. Bankruptcy is a fantastic vehicle for eliminating charge card, medical debt, and deficiencies as a result of a repossession or foreclosure, along with other unsecured debt. In the Chapter 7 bankruptcy, these debts are discharged at the end of your bankruptcy. In Chapter 13 bankruptcy, you might need to pay off part of your respective personal debt using your repayment schedule. Understand that in case you have debts secured by property (such as your home or car), the cancellation of the debt does not mean you are free to maintain the property.
Some debt is never discharged (canceled) in bankruptcy -- including child support and spousal support arrears, student education loans (except in limited circumstances), and tax debts first due inside the previous 3 years.
Can I keep my property if I file bankruptcy?
If you apply for Chapter 13 bankruptcy, the reply is yes. In Chapter 13 bankruptcy, you repay any some of one's debts via a payment schedule a duration of 3 to 5 years. In return, you might maintain your property (together with your car and residential), assuming you get caught up with payments on any loans secured by the property -- whilst making your repayment schedule payments. Your plan will also gain to ensure that creditors can get the maximum amount of with the Chapter 13 Bankruptcy since they would've received in a Chapter 7 Bankruptcy. For instance, in the event you own non-exempt real estate property priced at $10,000, your plan must pay your unsecured creditors no less than $10,000 (less costs of sale and also the trustee's commission).
In Chapter Seven bankruptcy, you may ask the bankruptcy court to release most of the debts you borrowed from. In exchange for this discharge, the bankruptcy trustee will take any property you possess which is not exempt from collection, flip it, and distribute the proceeds in your creditors. What property owner exempt from collection depends primarily on state law. Typically, exemptions start adding some equity in your house and car, retirement funds, public benefits, and a lot household goods, furniture, furnishings, clothing (apart from furs), appliances, books, and musical instruments.