Bankruptcy For Individuals – Types of Personal Bankruptcy
Bankruptcy laws throughout the United States are the same since they are created by the federal government. Approximately 1.6 million individuals file for bankruptcy protection yearly in the United States.There are two of the Chapter of Bankruptcy that apply to individuals.Chapter 7 and Chapter 13 are your choices as an individual.
When filing for bankruptcy under Chapter 7, an individual gives the court a list of all owned assets. With the exception of a few assets stipulated as exclusions by the government, a trustee will sell the assets to pay as much of your debt as possible. With Chapter 7, most of the individuals debts are wiped out. Some of the debts that cannot be wiped out include taxes, alimony and child support, student loans and debts that are not specifically mentioned in that particular bankruptcy filing.
You may only file for Chapter 7 Bankruptcy as frequent as every six years. To file costs you $299. When you file for bankruptcy under Chapter 13, the amount of the debt is reduced but the debt it self is not wiped out. A reduced extended repayment schedule is created by the trustee and the debtor may be allowed to keep assets that would have automatically been sold if Chapter 7 had been filed. The repayment period specified by the trustee is anywhere between 3-5 years usually. The court typically has the individual makes monthly payments to the trustee. The trustee then makes the payment to the creditors. To file under Chapter 13 you must owe less than $250 thousand in unsecured debt and less than $750 thousand in secured debt.
When it comes to personal Bankruptcy it is important to remember, you got into your financial situation by not paying who you owed when you were supposed to. Once the petition is approved and accepted by the court, make it a specific point to help prevent that same situation from happening again.
Do not take on new credit cards unless you can afford them. Also when you do have credit cards or loan payments, make them on time. Do not get yourself so far in debt you can not see the light at the end of the tunnel. Good luck and good fortune.