Bankruptcy serves as a real option for those who find themselves unable to pay off their debts. However, one of the main concerns that people have when it comes to bankruptcy is what will happen to their assets. To understand this, we must first explain the two most common forms of bankruptcy.
In chapter seven bankruptcy, your aim is to discharge, or wipe out, your debts completely. The downside, however, is that you may have to forfeit some of your assets in order to pay off at least part of your debt.
In contrast, chapter 13 bankruptcy creates a repayment plan which you follow for about 3 to 5 years. Chapter 13 doesn't get rid of your debt, but neither does it require you to liquidate your assets.
As you can see, chapter seven is the best option if you wish to rid yourself of your debt entirely. The major problem with this, besides the damage to your credit, is liquidation. In other words, you will have to get rid of some of your assets to help pay creditors what you owe them.
The good news (or the bad news, depending on your perspective) is that most people who file for chapter seven bankruptcy don't have any assets that qualify for liquidation. If your financial situation has come to this point, then you probably don't have much to liquidate.
Of course, most people are primarily concerned with their house (and to a lesser extent, their automobile). The details will depend on your state as well as how much your house is worth, but in most cases you have a considerable amount of protection when it comes to your house.
Thus, in order to successfully file bankruptcy while protecting your assets as best as possible, it is crucial to discuss your case thoroughly with a good bankruptcy attorney. A good bankruptcy lawyer can help you through the difficult process.
That doesn't mean that you shouldn't try to learn as much as possible before consulting your lawyer. You should continue to find articles like these because an informed client will make things easier for the lawyer, which can end up saving money in the long run.
In chapter seven bankruptcy, your aim is to discharge, or wipe out, your debts completely. The downside, however, is that you may have to forfeit some of your assets in order to pay off at least part of your debt.
In contrast, chapter 13 bankruptcy creates a repayment plan which you follow for about 3 to 5 years. Chapter 13 doesn't get rid of your debt, but neither does it require you to liquidate your assets.
As you can see, chapter seven is the best option if you wish to rid yourself of your debt entirely. The major problem with this, besides the damage to your credit, is liquidation. In other words, you will have to get rid of some of your assets to help pay creditors what you owe them.
The good news (or the bad news, depending on your perspective) is that most people who file for chapter seven bankruptcy don't have any assets that qualify for liquidation. If your financial situation has come to this point, then you probably don't have much to liquidate.
Of course, most people are primarily concerned with their house (and to a lesser extent, their automobile). The details will depend on your state as well as how much your house is worth, but in most cases you have a considerable amount of protection when it comes to your house.
Thus, in order to successfully file bankruptcy while protecting your assets as best as possible, it is crucial to discuss your case thoroughly with a good bankruptcy attorney. A good bankruptcy lawyer can help you through the difficult process.
That doesn't mean that you shouldn't try to learn as much as possible before consulting your lawyer. You should continue to find articles like these because an informed client will make things easier for the lawyer, which can end up saving money in the long run.
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