If your bills have become out of control and you don't see how you are ever going to catch up with them, then you may have come to a position where you are considering bankruptcy as a way out of the hole you have found yourself in. If this is true, then you probably have a lot of questions about bankruptcy. Here are some answers to questions many people find themselves asking about the process, as well as other aspects of bankruptcy.
What is bankruptcy?
Bankruptcy is a process that people who have a certain amount of debt that's not within their means to pay off can use to wipe that debt out or to deal with the debt in a manner that is tailor-made so they can succeed at paying it down. The bankruptcy process will take place through the court system, but there may also be other things that you will need to do. For example, in some states, you will need to take financial education classes before you can complete your bankruptcy.
Can anyone file for bankruptcy?
Anyone can file for bankruptcy and this includes a sole person, a couple, or even a company. However, this doesn't mean that you are going to be granted bankruptcy because this is something that the court will decide after hearing your case and reviewing your documents.
What is the difference between chapter 7 and chapter 13 bankruptcy?
Chapter 7 and 13 are the most common types of bankruptcy. With chapter 7, you normally get things like medical bills and credit card debt discharged. Your nonexempt assets may be sold in order to pay creditors. With chapter 13, you will enter a repayment plan to pay back the creditors, but you can keep your assets.
Which type of bankruptcy is the quickest to compete?
A chapter 13 bankruptcy will take the longest for you to complete because you will have to work on paying off your debt which can take more than a few years. On the other hand, chapter 7 can be completed in just a few months of time.
Do you get to keep any of your lines of credit?
You may be wondering if you can keep the lines of credit you have that you have been able to stay on top of. The answer is that it will be up to the companies to decide to keep your lines of credit open after you have started the bankruptcy process.
For more information, talk with a bankruptcy lawyer today.