Bankruptcy is court ordered protection from debt, it does not require agreement from your creditors. To make sure your debts will be erased, you should file bankruptcy. A Chapter 13 discharge includes all the debts dealt with in the plan, even if no payments are made. A Chapter 7 discharge erases most debts with a few exceptions. Unfortunately, many clients find me after they have already wasted large amounts of money, and time in consolidation scams.
As soon as your bankruptcy is filed, creditors must immediately stop all collection activity; in fact, if you file bankruptcy immediately after your car is repossessed the creditor has to immediately return it and ask questions later. No debt consolidation plan offers the kind of protection you get in bankruptcy.
Saturday, June 27, 2009
Sunday, April 12, 2009
Bankruptcy Explained
Bankruptcy is protection, it lets a person or business, in financial trouble pay off debts by dividing assets among creditors. Certain types of bankruptcy let a person or business use income to pay off debts. When finished, debts are erased and hope is restored.
Bankruptcy also lets a person or business free themselves from financial obligations, even if the debts are not paid in full. Hearings take place in the United States Bankruptcy Courts .
The most common type of bankruptcy is Chapter 7; in this type a trustee collects unprotected property, sells it and distributes proceeds.
Under Chapters 11, 12, and 13 income is used to pay off debts. A trustee is appointed to supervise assets. Generally after a bankruptcy is filed creditors must stop collection activity.
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