Abuse of Bankruptcy - What Constitutes Abuse?
"Having a substantial amount of unsecured debt may be one reason a debtor chooses to apply for chapter 7 bankruptcy. By filing for chapter 7 bankruptcy, the debtor can receive a discharge of all unsecured debts. Credit card debt, medical bills, litigation, and other debts are discharged, giving the debtor a clean slate. However, this option is typically only available to those with few assets that can be distributed to creditors.If a debtor has more than $15,000 in equity in his home, or $30,000 in equity for a married couple, the home can be sold and the excess equity, $15,000 or $30,000, is distributed among creditors. If a debtor realizes he has a substantial amount of assets that will be seized by creditors, he may choose to file for chapter 13 bankruptcy, which would allow him to retain the majority of his assets and pay a portion of his debt over three to five years.However, some debtors avoid registering for chapter 13 bankruptcy because it requires the repayment of a portion of the loan over three to five years before the debtor is discharged. These debtors attempt to use various types of asset protection funds, transfer assets to different individuals, relocate assets to states with larger exemptions, and sometimes attempt to conceal their assets.However, debtors attempting such practices should bear in mind that the bankruptcy judge can punish them by denying them a bankruptcy discharge or even by using the criminal code to punish them. Sections 151-155 of Title 18 of the United States Code provide various penalties for concealment of assets, fraudulent oaths, false claims, fee fixing, and other criminal acts.
" - https://www.affordablecebu.com/
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"Abuse of Bankruptcy - What Constitutes Abuse?"
was written by Mary
under the Finance / Wealth
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comments. The article was created on 03 June 2023
and updated on 03 June 2023