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Common Questions about Bankruptcy

Posted By admin || 6-Feb-2012

Common Questions about BankruptcyIf you're not familiar with how bankruptcy works its common to have questions about the process. If you have been struggling to pay your debt and continue to fall further behind, bankruptcy is an option worth researching.

The following questions are often asked by those who are considering bankruptcy as a possible solution:

Q: What is bankruptcy?

A: A federal court process that allows consumers and businesses to resolve outstanding debt obligations by either eliminating debt or restructuring debt with bankruptcy court protection.

Q: Does bankruptcy wipe out all debts?

A: While the bankruptcy process has the ability to wipe out certain kinds of debt, there are debts that will not qualify for discharge.

Q: Chapter 7 verses Chapter 13: What's the difference?

A: Chapter 7 wipes out or discharges debts and Chapter 13 reorganizes debt with a repayment plan.

Q: Which chapter lets me keep my property?

A: Each chapter has specific exemptions and rules that allow you, in many cases, to keep your property. Chapter 13 allows you to keep your property as long as payments are made accordingly. If you have nonexempt assets in Chapter 7 they can be liquidated and used to pay outstanding creditors. With Chapter 7, if you don't have assets to liquidate, if your debts qualify, they can be discharged.

Q: Am I free to choose which chapter to file?

A: Each chapter has certain qualifications that must be met in order to file so it will depend on your unique financial situation. Getting a detailed idea of what chapter you should file can be discussed with a qualified bankruptcy attorney.

Categories: Bankruptcy
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