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A Look At Personal Bankruptcy & What To Expect
By: Susan Green
One of the most difficult decisions that you can face is whether or
not to file for bankruptcy. For individuals, there are basically two
types of personal bankruptcy, which includes Chapter 7 and Chapter 13.
Designed to give the filer a fresh start in life by wiping out certain
debts, a Chapter 7 bankruptcy will rid the filer of credit card and
other unsecured debt. A chapter 13 bankruptcy, on the other hand, is a
court-approved payment plan in which the filer is required to repay a
predetermined percentage of their debt. The determination of which
chapter to file will be based on the filer’s disposable income, if
any, after paying their necessary monthly bills.
When many people file for bankruptcy, their first thoughts are of
their assets and whether or not they may lose their home. In a Chapter
13 repayment plan, the majority of filers are allowed to keep their
property in exchange for repaying a portion of their debts. A Chapter
7, however, is designed to be a liquidation process that often results
in the sale of non-exempt property. Which property is non-exempt in a
bankruptcy proceeding? Each state has it’s own laws pertaining to the
amount of property that an individual or married couple can keep
without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition with the
local bankruptcy court. This can either be done individually, also
known as pro se, or with the help of an attorney. For most, hiring an
attorney is the best way to make sure that every form is completed
accurately and in order to make sure their assets are protected as
much as possible. Upon the filing of a bankruptcy petition, the court
will assign a trustee to the case and will set a date for a Meeting of
the Creditors. Although creditors of the filer are invited to attend,
they are not required to do so. The filer, however, is required to
attend and will be questioned by the trustee, under oath, while having
the meeting recorded. This meeting is typically the only appearance
required of the filer unless special circumstances are present.
Following the Meeting of the Creditors, often referred to as the 341
meeting, the creditors will have 30 days to object to the filers
property exemptions and another 30 days to object to the discharge if
the filing is a Chapter 7 bankruptcy. In a Chapter 13 proceeding,
creditors may object to the payment plan but the discharge will not be
granted until the payment plan is complete. A Chapter 13 bankruptcy
can last for up to 5 years before the payments are completed and a
discharge is issued. Following the discharge, the bankruptcy case will
be closed and the process will be complete.
This article is to be used for informational purposes only. It should
not be used as, in place of or in conjunction with professional legal
advice regarding bankruptcy. Anyone who is considering filing a
petition for either personal or business bankruptcy should consult a
licensed attorney in their area for additional information and/or
legal advice.
About the Author:
The author is a regular contributor to
BK Info Today where more
finance, savings, credit and bankruptcy information is freely
available.
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