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Frequently Asked Questions And Answers Regarding Bankruptcy

Frequently Asked Questions And Answers Regarding Bankruptcy
"""Bankruptcy is undoubtedly one of the financial products that have proven to be confusing to the general public. This dearth of knowledge on a particular topic generates inaccurate beliefs. There are a number of myths encircling bankruptcy. This article endeavors to address the numerous questions consumers have about this topic.

What are the most common chapters, and which one should I choose?

Each chapter of bankruptcy is applicable to a unique circumstance and results in a unique outcome. Chapter 7 and Chapter 13 are the two most common chapters, with the remaining chapters being Chapter 9 for municipalities, Chapter 11 for businesses, and Chapter 10 for family producers.

Regarding the second issue, which option to select, it is sometimes not a matter of preference or expediency, but of eligibility. Some individuals may qualify for Chapter 7 and Chapter 13, while others may only qualify for Chapter 13. Research the eligibility requirements for each chapter to determine which one is right for you. Alternatively, if you qualify for both chapters, the decision is entirely up to you and dependent on your intentions. Chapter 7 bankruptcy is extremely common because the debtor is not required to repay his debts. Chapter 13 also has advantages that should be considered when making this decision.

Can Any Individual Declare Bankruptcy?

As with any norm, there are rare exceptions to this one. Generally speaking, any individual or business can petition for bankruptcy if necessary.

FAQ No. 3: Will They Take All My Property? Which Items May I Retain?

No, the law protects individuals against losing all of their property. There are certain assets that cannot be seized, which are known as """"exempt"""". Which property is exempt? For instance, vehicles (though there may be a value limit, you may want to investigate), home equity (there may be a value limit here as well, investigate thoroughly), jewelry, and working equipment that is absolutely essential for the debtor to work, etc.

FAQ #4: Will I Have All My Debts Discharged?

Perhaps not. There are certain types of debt that cannot be discharged, including tax debts, alimony or maintenance debts, government student loans, and debts obtained through fraudulent procedures or actions, among others.

FAQ #5: Does Bankruptcy Stay On My Record After Being Discharged?

Certainly, a bankruptcy claim is one of the worst negative inputs a person can have, and it will remain on his or her credit report for up to 10 years, with a minimum of 7 years. No, there is also no means to remove the input, if that is what you were thinking.

Will I Be Able To Acquire Financing After Filing?

In general, it will take the debtor some time to acquire financing after filing for bankruptcy. Even though there are numerous financial institutions that specialize in high-risk lending and may be willing to assist the debtor, it is advisable for the applicant to wait at least a year after the discharge of the bankruptcy before applying for a loan, with two years being the optimal time. Again, it all comes down to the creditor's willingness to lend, not the borrower's desire to receive a loan.""

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"Frequently Asked Questions And Answers Regarding Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 145 times and generated 1 comments. The article was created on and updated on 02 June 2023.
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