Bankruptcy Articles

When filing bankruptcy for the first time, people have many questions. A bankruptcy FAQ can explain simple and basic concept of bankruptcy such as how to file bankruptcy, what types of bankruptcy can a person file, and how much it costs to file bankruptcy. A bankruptcy FAQ often discusses chapter 7 bankruptcy and chapter 13 bankruptcy in detail.

The first question that comes to people’s mind on the subject of bankruptcy and often the first question in a bankruptcy FAQ is how to file bankruptcy. Knowing how to file bankruptcy properly will avoid many problems that can result on a legal standpoint. The first step of filing bankruptcy is to file a petition and then pay all the needed fees such as administrative fees and the filing fee.

It is important to know what type of bankruptcy is the most suitable for which situation. A bankruptcy FAQ will distinguish between chapter 7 bankruptcy, chapter 13 bankruptcy, chapter 11 bankruptcy for business reorganization and even chapter 12. Choosing the type of bankruptcy to file is important and bankruptcy FAQ will provide lots of useful information.

Chapter 7 bankruptcy used to be the most desirable and the most common form of bankruptcy. However the new bankruptcy laws make it harder for people to qualify for chapter 7 bankruptcy so many people file chapter 13 bankruptcy instead. Also, with chapter 13, debtors can keep their assets instead of having to liquidate them all as in the case of chapter 7 bankruptcy.

A bankruptcy FAQ will not fail to mention chapter 13 bankruptcy in detail. Chapter 13 bankruptcy is all about repayment plan. In stead of putting all assets at the disposal of the bankruptcy trustee to liquidate and then pay creditors, debtor can come up with a repayment plan and keep the assets. Debtor seeking chapter 13 bankruptcy will have to prove that he/she has enough income to pay creditors.

The cost of filing bankruptcy is also one of the most common question in any bankruptcy FAQ. It generally costs only a couple hundred dollars to file bankruptcy including the court fees and administrative expenses. However, many people hire a bankruptcy lawyer to help them therefore increasing the cost of filing many fold.

When filing bankruptcy, do not expect all debts to go away. Some debts will not be discharged even when the debtor files bankruptcy. Taxes and guaranteed student loans for example are usually not discharged. The bankruptcy laws involving what debts are discharged and what are not are very complicated.

Overall, most people find information in a bankruptcy FAQ useful, especially for anyone new to filing bankruptcy. It is important to learn as much as possible about how to file and what to do as well as decide if filing bankruptcy is the best choice for a your financial situation.

Tags: Bankruptcy
Filed under: Bankruptcy