Bankruptcy FAQs Answered
Whenever someone is thinking of filing bankruptcy, a good place to start learning about bankruptcy is the bankruptcy FAQ. A bankruptcy FAQ usually outlines basics information about how to file bankruptcy, different types of bankruptcy such as chapter 7 bankruptcy or chapter 13 bankruptcy as well as common questions that people ask about the subject.
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.
It is important to know what type of bankruptcy is the most suitable for which situation. A bankruptcy FAQ will distinguish between chapter 7 bankruptcy, chapter 13 bankruptcy, chapter 11 bankruptcy for business reorganization and even chapter 12. Choosing the type of bankruptcy to file is important and bankruptcy FAQ will provide lots of useful information.
Chapter 7 bankruptcy used to be the most desirable and the most common form of bankruptcy. However the new bankruptcy laws make it harder for people to qualify for chapter 7 bankruptcy so many people file chapter 13 bankruptcy instead. Also, with chapter 13, debtors can keep their assets instead of having to liquidate them all as in the case of chapter 7 bankruptcy.
Chapter 13 bankruptcy is often the highlight of a bankruptcy FAQ because it is the most common type of bankruptcy filed nowadays. In a chapter 13 bankruptcy, debtor filing chapter 13 comes up with a repayment plan that the court approves to pay off most of the debts to the creditors. Some debts are discharged but most are not.
Another popular question in a bankruptcy FAQ is how much it costs to file bankruptcy. Some people think that it costs a lot to file bankruptcy. The truth is that the filing fee and administrative fee are only a few hundred dollars. However, if you hire a bankruptcy attorney, the cost goes up because of the attorney fee and not the filing fee.
When filing bankruptcy, do not expect all debts to go away. Some debts will not be discharged even when the debtor files bankruptcy. Taxes and guaranteed student loans for example are usually not discharged. The bankruptcy laws involving what debts are discharged and what are not are very complicated.
Overall, most people find information in a bankruptcy FAQ useful, especially for anyone new to filing bankruptcy. It is important to learn as much as possible about how to file and what to do as well as decide if filing bankruptcy is the best choice for a your financial situation.
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