Personal Bankruptcy Overview
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*The goal of this page is to provide you with a brief overview of bankruptcy. You need to consult with a licensed and reputable attorney before filing for bankruptcy.
Filing for bankruptcy should only be considered as a last resort. Bankruptcy stops lawsuits and any other attempts by creditors or collection agencies
to collect from you.
Chapter 7 Bankruptcy
Under Chapter 7 all non exempt assets are liquidated or turned over to creditors. Exempt property may include automobiles, work-related tools, and basic household furnishings. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy allows people with a steady job to keep property like their home or car. In Chapter 13 the court approves a repayment plan that allows you to use your future income to pay off debts during a three-to-five-year period while keeping your property. A court-appointed trustee oversees the repayment plan. After you have made all the payments under the plan, you receive a discharge of your debts.
Both types of bankruptcy may get rid of unsecured debts and stop
foreclosures, repossessions, garnishments and utility shut-offs, and debt
collection activities. Both also provide exemptions that allow people to
keep certain assets, although exemption amounts vary by state.
Alternatives to Bankruptcy
You may be able to avoid bankruptcy through debt settlement, a process whereby you negotiate with your creditors to reduce debt balances. Is is usually better to enlist the help of a reputable debt settlement firm when trying to avoid bankruptcy.
After bankruptcy you need to concentrate on fixing your credit report. The faster you clean up your credit report the quicker you can improve your credit score. Then focus on rebuilding your credit history. You should also monitor your credit. Read more about fixing and improving credit...
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