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.
There are more than one type of bankruptcy to file. Any good bankruptcy FAQ will start with distinguishing between different types of bankruptcy such as chapter 7, chapter 13, chapter 11 and chapter 12 bankruptcy. A person seeking to file bankruptcy needs to know in detail what type of bankruptcy is the best for his/her situation.
For anyone with lots of debt, filing chapter 7 seems like the best idea and a bankruptcy FAQ will explain why. Most debts are discharged when a chapter 7 is filed however not all. The major drawback of filing chapter 7 is that almost all assets of the filer are liquidated and proceeds used to pay off debts. There are certain assets that are exempt but most people will lose all their assets in the process.
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.
An important question in a bankruptcy FAQ is the cost of filing bankruptcy. Some people think it costs a lot to file and they simply cannot afford to file for bankruptcy. However, in fact it only costs a few hundred dollars to file and pay the necessary fees if you file bankruptcy yourself. If you hire a lawyer, however, the cost can escalate dramatically.
Different types of debts are discharged differently. It also depends on the type of bankruptcy filed. The bankruptcy laws have so many provisions and interpretations and each debt is considered separately. A bankruptcy lawyer can help you interpret if a debt will be discharged by the filing or not.
There are so many questions about bankruptcy that a person seeking to file bankruptcy needs to know. A bankruptcy FAQ should give an overview of filing bankruptcy as well as answers important questions that most people have encountered. Do not file bankruptcy if you have other options.
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This article was a small taste of our library of Bankruptcy FAQs that we have put together and answered for you over at the free Bankruptcy Laws resource site. Visit us today to learn the answer to your bankruptcy questions!
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