Which Are The Gains Of A Personal Bankruptcy?-00-6409

By Author: rafalinares
Total Articles: 4393
Comment this article

Bankruptcy assists do away with a percentage or whole of your debts and/or offers a payment plan with which you can remunerate back debts beneath the supervision of the court. When you declare bankruptcy, it puts an automatic stay on any legal activity (collections, garnishment, foreclosure etc) taken by creditors/lenders because of non-payment of debt.

There are personal and business bankruptcies. The most common types of personal bankruptcies are Chapter 7 and Chapter 13.

When should you file bankruptcy?

Whether or not you're unable to manage your debts and must eliminate or reorganize them, you can look at announce publicly or officially bankruptcy. Given beneath are conditions when you can declare bankruptcy.

You're paying the minimum on your bills
More than one account are in collection
The lender is regarding to declare foreclosure
You've lost your principal activity in your life that you do to earn money not long ago
Cannot budget and get out of debt in next 5 years

What is discharge in bankruptcy?

The discharge is a court order releasing the debtor ...
... from the personal liability of paying off debts. The discharge order is released after 4 months of filing Chapter 7 bankruptcies and 3-5 years of filing Chapter 13 bankruptcies (30-60 days after your final payment).

Once the discharge order is released, it stops creditors from any collection actions or personal intercommunicating through phone calls, letters or mails. In case of secured debts (mortgage or car loan) included in bankruptcies, the discharge order doesn't remove liens on your property. So, the lender can carry out a foreclosure the automatic stay is lifted. To avoid a foreclosure, you can sign on a reafirmation agreement (for exempt equity) and commence paying your mortgage again.

In which way to file bankruptcy

Rather than filing bankruptcy on your own, it's better to take support of an attorney who'll guide you throughout the process. There are 4 steps to filing or announce publicly or officially bankruptcy. These are:

Deciding which Chapter to file
Enrolling for Credit Counseling
Means Test
Filing docs with financial statement

For more details on in which way to declare bankruptcy, check out the data on bankruptcy filings.

What happens after you declare bankruptcy?

Take a look at the bankruptcy data given beneath and get an idea of what happens after you declare bankruptcy.

1. Creditors are notified: Within 14 days of announce publicly or officially bankruptcy, the court notifies your creditors regarding the filing. The court sends a mail with details on the case number, automatic stay, name of your trustee and the date for meeting with creditors.

2. Meeting with creditors: Within the following 20-40 days, the court contains the 341 Meeting with your creditors and trustee. Here, you'll have to answer the trustee's questions on assets, debts etc. The creditors will then question you beneath oath. Your attorney will negotiate with them if required.

3. Trustee's role: Within 30-40 days of the filing, the trustee determines if your assets can be liquidated to remunerate the creditors. Whether or not it's Chapter7 and all your assets are exempt (protected beneath bankruptcy law), a no distribution report are going to be filed at the court. But if there are non-exempt assets, the trustee sells them off in order to remunerate your creditors. In case of Chapter 13, the trustee reviews the payment plan you've proposed for approval.

4. Creditors can challenge discharge: By the 60th day of the filing, your creditors can file a lawsuit or challenge the discharge of your debts.

5. Creditors file claims: By day 90 (after the 341 meeting), creditors must file their claims versus you (the debtor).

6. Financial Management course: You must go through a personal financial management course as arranged by your attorney. This will make you eligible for the discharge.

Can you keep home after filing bankruptcy?

You'll be able to keep your home if you've filed Chapter 13. But if you've filed Chapter 7, you can or can not be able to defend the home equity (fair market value minus liens) from your creditors/lenders. There are Federal and State Homestead exemptions; if your equity is less than the exemption, then you'll be able to keep your home.

Federal and State Exemptions

You can select Federal exemption regardless of how long you're living in the state. The Federal exemption is limited to equity worth $125,000 if the property has been acquired within 1215 days prior to announce publicly or officially bankruptcy.

In states where Federal exemptions are not available, filers can use the current state's exemption if they lived in the state for leastwise 2 years. Those who haven't lived in the state for leastwise 2 years can use the exemption of the state where they have stayed for the most of the time for 180 days before the 2 year period.

Whether or not your home equity is higher than the state exemption, then the trustee will trade your home. He'll offer you the exempted amount and remunerate off the rest to your lender after deducting his fee. Whether or not you still owe money on the house, then you can reaffirm the debt and continue to pay under the existing terms and conditions. Another option is to redeem the house by buying it from the lender through a single payment for its current value.

However, if you have sold off non-exempt assets in 10 years prior to the filing in order to protect them from your creditors, then your exemption will be reduced by the value of those assets.

What debts are not discharged?

There are certain debts which cannot be discharged by filing a bankruptcy. These include: student loans, back taxes, fraudulent debts, alimony, child support, large purchases ,government penalty

About the Author:

http://www.articuloz.com/otro-articulos/consejos-para-la-busqueda-de-abogado-para-un-procedimiento-concursal-2229261.html (I) // http://www.abogadotenerife.com/concursodeacreedores.php (II)