Gather Necessary Bankruptcy Information Before Filing For It
by
Carlton Mansour
Bankruptcy can be a valuable solution to cope with severe financial crisis. However, before opting for it, it is important to know the various pros and cons associated with it. Since it is not likely for laypersons to know about the details of bankruptcy, it is advisable to seek professional advice for appropriate bankruptcy information.
Before discussing any further it is important to know what exactly bankruptcy is. Bankruptcy is a legal procedure meant to help people overcome severe debt situation by declaring their incapability to make debt payments. While bankruptcy can be beneficial for people in dealing with severe financial difficulties, there are certain important facts about bankruptcy that you need to know. Consulting an expert legal advisor can help you obtain essential bankruptcy advice that would help you in determining if this is an appropriate solution for you. Let us discuss some of the significant facts about this particular debt solution:
Bankruptcy is of three types, namely chapter 7 bankruptcy, chapter 13 bankruptcy and chapter 11 bankruptcy. Chapter 7 bankruptcy involves using the debtors non-exempt assets for making payments to the creditors. The eligibility criteria for this type of bankruptcy is to pass a means test that is done to prove that the debtors annual income is less than the average income for their family size in their state. Anyone who fails to get through the means test has to opt for some other form of bankruptcy.
Chapter 13 bankruptcy involves an easy repayment plan for the debtors that allow them to make debt payments as per their affordability over a fixed period of time. The debtor does not need to make payments for any debt amount that remains after the lapse of the fixed time period.
Chapter 11 bankruptcy is ideal for business owners who are allowed to continue with their business while making debt payments based on a plan that is approved and monitored by the court.
Though it is true that with bankruptcy filing all your credit cards and bank accounts are closed by the court, it can be viewed as an opportunity to start afresh. In simple words, bankruptcy provides you the chance to give a new start to your financial records.
While in some forms of bankruptcy, the court seizes your non-exempt assets for making debt payments to the lenders, there are allowances in the bankruptcy laws permitting people to hold back many of their valuable assets like jewelry, furniture, clothing, insurances, pension funds, vehicles that are inexpensive, tools and in some cases your home. It is just important to choose the right type of bankruptcy as per your requirements and circumstances.
The bankruptcy law allows people to file for bankruptcy as many times as their financial situation requires. The only limitation to this law is that in some forms of bankruptcy you need to maintain a particular time gap between two successive filings.
In order to deal with your financial crises methodically and efficiently, it is important that you acquire necessary bankruptcy advice from an experienced and knowledgeable legal practitioner.
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