Debt Declaration – Bad Credit Help & advice, Debt Settlement Tips
Finance & Loans

Life after a bankruptcy

September 18, 2012 by · Leave a Comment 

In order to get relief from debt, you need to file a bankruptcy case with the courts. Those persons who are seeking a discharge of personal debt, it is a Chapter 7 filing and for those who are seeking court approved repayment plan, it is a Chapter 13 Bankruptcy Code filing. As soon as you file a case, an “automatic stay” goes into effect preventing creditors from further actions against you without court approval. Therefore, filing bankruptcy brings overnight relief to a person.

In a Chapter 7 filing, all non-exempt assets go to a court appointed trustee who may sell assets to use proceeds to repay your debt. The exempt assets include your home, vehicles, bank accounts, and retirement plans. So, you don’t have to panic about court appointed trustee for exempt assets. For someone who has significant non-exempt assets, filing a Chapter 13 for restructuring may be beneficial. In a Chapter 13 filing some debt such as taxes, back child support must be paid in full. However, for other debt, it would be a percentage of the total that will be paid back and some may be not paid back at all. An example is interest on credit card debt that goes to zero.

Comments are closed.