Bankruptcy Primer
Bankruptcy is the legal means of wiping out debt. It may seem like a simple solution when you get in over your head in debt. Bankruptcy, though, should not be taken lightly. There are many repercussions of filing bankruptcy.
Before you file bankruptcy you should have a good understanding of the process and what to expect after you have competed filing.
Bankruptcy is meant to give a person a fresh start by relieving debt. A person can file bankruptcy for most debts they have incurred. Some debts can not be cleared through bankruptcy, though. It is very important for a person to check each of their debts to see if they can be cleared through filing.
During a bankruptcy proceeding a person has to make attempts to pay what they can. Most assets and cash on hand is seized and used to pay off the debts. There are some assets which are exempt and can not be used to pay off debts. Once a person starts bankruptcy proceedings creditors can no longer attempt to collect debts from them.
Bankruptcy is filed in a U.S. Bankruptcy Court. There are six types of bankruptcy. Only a few of these apply to an individual. Chapter 7 and Chapter 13 bankruptcies are the most commonly filed by individuals.
Under Chapter 13 a repayment plan is set up instead of assets being seized. The exempt assets list varies from state to state, so a person should check their states bankruptcy laws to see what assets they will not have to surrender.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed how individuals file bankruptcy. The aim of this act is to prevent people from using bankruptcy as a way to get out of debt and instead use alternatives to help them get out of debt.
It bases the idea of paying back debts on a person income. If a person has the ability to payback their debts then they are required to do so. It also requires credit counselling to help ensure a person does not end up with debt problems in the future.
Perhaps the most important point for a person to understand about bankruptcy is that it is not just an easy method to clear debts. When a person files for bankruptcy the creditors are not just going to walk away. The court will try to ensure that every step is taken to pay back as much debt as possible.
The court will force a person to sell their assets, like their vehicle, to pay off the debts. Bankruptcy is more about protecting the individual from having creditors harass them or attempt to collect debts. Once a debt is cleared through bankruptcy, the creditor can not attempt to collect on the debt ever again.
James Copper
http://www.articlesbase.com/finance-articles/bankruptcy-primer-132114.html
5 Responses to “Bankruptcy Primer”
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I need to rebuild my credit after going through a bankruptcy.?I have already got a credit card with First Primer and Orchard bank. Are there any others I should try? I still have a few outstanding medical bills I am paying off, so I am sure that is showing up on my credit reports as well.
All you can do is to pay your bills, pay them on time, and be responsible. Continue to pay your medical bills and your credit will improve.References :
best way is to keep the cards you have. Put back a couple of 100.00 and then go out and spend a 100.00 on each card. When the bills come in pay them off. Do this for a while and you will see that other offers will start coming in. Do not put anything on the cards that you can not pay.References :
Those are the ones that I used after my bankruptcy just use them for every day things and make sure to pay them off in full before the due dates and you will be fine in about 12-months.
You can also try Capital One and H.S.B.C. after you have made a few payments on the others.References : Finance Manager for over 9-years / BK in 2000.
You NOW have to bee a good manager of your accounts. Don't charge TOO much & pay off what you can … even if it's only HALF of what you owe. Also, depending on how long it's been since you filed for bankruptcy, it really does matter how you manage your accounts now, BUT because of the bankruptcy, it's STILL going to take you 10 years to get your name & credit back!References : This happened to me in '96, so I should know!