Personal Bankruptcy Questions
- Filing for bankruptcy is a last resort for some people to help them establish a better financial situation.money6 image by max from Fotolia.com
The process of filing for bankruptcy is a formal hearing that is held in a Federal Courtroom with a representative from the debtors' offices to relieve any outstanding debt, and in some cases transfer remaining assets that the person in debt might have. Filing for bankruptcy can be a tough personal and financial decision to make. When choosing the option, it can take months of preparation that require a lot of time and detailed research. - When filing for personal bankruptcy, many people fear that they will lose all of their assets including their cars and homes. When filing for personal Chapter 13 bankruptcy, cars and homes are not counted as an asset as long as the equity of the property and the car loan are filed as being fully exempt. Once the bankruptcy takes effect, the scheduled monthly payments are required to be made for the term of the agreement.
- Some people choose to file for bankruptcy after an unforeseen financial crisis has taken place, like a medical emergency that has resulted in high bills, sudden unemployment, or a severe buildup of personal debt. In most cases the debt is too high to pay off in a few years, and can leave a huge burden after an unfortunate situation.
- Filing for personal bankruptcy allows for outstanding large debt, generally unsecured debt, to be discharged, with a few exceptions. Debts that are outstanding from Student Loans, Child Support, Alimony, and Income Taxes are not dissolved.
- After filing for bankruptcy it will take roughly 3 to 5 months for the debt to be discharged from the record. Once the debt has been erased, the bankruptcy filing will stay on record for 10 years. As time passes, the filing loses its significance and the individual gradually becomes an improved credit risk since filing for bankruptcy.
