What is Bankruptcy? A Simple Explanation to a Complicated Issue
If you have financial problems due to a number of debts you should consider the option of bankruptcy as thousands of other Americans. I would like to take this little opportunity to explain in a simple, basic and in legal terms, which can be confusing. When we talk of bankruptcy (in personal terms), there are a number of different options, most of the time dealing with personal debts, and we will refer to two specific situations: Chapter 7 and Chapter 13. For purposes of brevity will discuss these two types of bankruptcy.
Chapter 7 is about to start again. A judge will completely erase all your debts. While this is more positive, this process is much more complex. In this case the judge decides whether to sell personal items to pay its debts to creditors. Has no right to retain any property of value. Chapter 7 can be considered as a complete liquidation of its assets.
Chapter 13 is not as drastic as Chapter 7. Chapter 13 requires a judge to order a structure for payments to all those to whom he owes. This plan is organized for a payment period of between 3-5 years to pay 30% or 50% of your debts, this only depends on what the judge dictates. This type of bankruptcy that allows only can touch some of their personal property.
Please keep something in mind, since October 2005, with the reform of bankruptcy laws, has become more difficult to declare bankruptcy. To make the process must be brought before a judge who decides whether you have bases applicable to your income and your current situation. If you are seriously considering filing for bankruptcy, please take a moment to speak with a financial expert. He or she will be able to understand your options and can help you avoid a mistake that you can repent.
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