Top Bankruptcy Questions Answered
A decision to file bankruptcy should be made only after one has fully understood the ins and outs of the process. A proper understanding is essential to make the most out of this solution for your financial problems. In this article, we are answering 5 commonly asked bankruptcy-related questions.
What is bankruptcy?
Bankruptcy is a legal procedure in which an individual who cannot pay off their debt or bills can get a fresh financial start. The federal law allows eligible individuals to file bankruptcy, which stops their creditors from making collection attempts.
What kind of financial protection does bankruptcy provide?
The financial protection provided to an applicant varies from case to case. Generally speaking, bankruptcy can provide any one or more of the following types of protection.
- It can eliminate your legal obligation pay some or all of your debts. The process is known as debt discharge.
- It can stop foreclosure on your home, giving you an opportunity to catch up on missed payments.
- It can prevent creditor from making collection attempts, which may include wage garnishment.
Which bankruptcy chapter should I choose? Are there any significant differences?
The choice depends on your qualification for bankruptcy, personal preferences, and financial circumstances.
- Chapter 7 – It is also known as liquidation or straight bankruptcy. In chapter 7 bankruptcy, an individual can keep all of their exempted properties except for a property that is subjected to a lien, which the applicant is unable to pay.
- Chapter 13 – This is a type of bankruptcy, which allows the applicant to pay off all or part of their debts over a longer period of time using their current income.
This article is intended to answer some basic questions about bankruptcy. If you have any more questions, please contact the bankruptcy attorneys at Brock & Stout. Call us today at 1-800-884-9600.