What Types Of Bankruptcy Are There

Category: Finance.

Many people, in today s economy, find that they are falling beneath a mountain of debt. Debt continues to accumulate and possessions become threatened when the debtor is no longer able to pay the bills.

The reasons are many and some are through no fault of their own yet the outcome is the same. Accidents, unforeseen job layoffs and natural catastrophes can destroy a person s home, automobile and their job. Unfortunately there are many myths involving the whole bankruptcy process but in this article many of the more common questions will be answered. As more people find themselves becoming unable to pay their debts, they are forced to undergo bankruptcy. Hopefully you will find the information and help you are searching for and so desperately need. There are four types of bankruptcy within the United States judicial system.

What types of bankruptcy are there? Chapters 7, 11, 12 and 13, with each chapter covered under different guidelines and laws. Businesses typically file Chapter 11 whereas farm owners will file for Chapter 1Under Chapters 11, 12 and 13 the debtor agrees to a plan where he or she will repay a portion of the debts back to the creditor. The general breakdown of each chapter is all dependent upon the particular situation of the debtor. Chapter 7 is a complete liquidation and any assets obtained through secured debts are repossessed and sold. Is my home going to be foreclosed and sold?

The remainder of the debt is discharged. When a person takes out a mortgage on a home it is considered a secured debt. If you own your home without any mortgage, it is considered an asset and can also be seized by the courts as a way to repay part of your debts to your collectors. That means if you cannot make the payments the bank can seize the property and then sell it. Homes are most often the first thing sold as they are generally worth more and can repay more of the debt that is owed. How long will my bankruptcy be on my credit report?

There are ways to protect your home from being foreclosed but you have to seek the advice of an experienced bankruptcy attorney for help. Bankruptcy can remain on your credit report for up to ten years from the date of filing. It will have an impact on your credit score but not nearly as bad as it was before. Once the bankruptcy has been discharged all of the reported debts will show as zero. This is a golden opportunity to learn from your mistakes and learn how to manage your debts better. Many people do not learn from their bankruptcy mistakes and find themselves in the same situation repeatedly. You will eventually be out from under the looming bankruptcy but staying out of trouble is an entirely different story.

How do I deal with credit collectors? Credit collectors can employ sneaky, underhanded methods of trying to collect their debts. Well. unfortunately ignoring credit collectors is not an option. They get paid when you pay your debt. Once the bankruptcy process has been filed, debt collectors are not allowed to continue their threatening tactics. If you have begun the process of filing for bankruptcy and have met with your attorney, any calls or letters you receive from a collection agency need to be directed to your attorney. If they continue to do so you will need to file suit against them.

The laws do not apply if you are only considering the process. New debt collection laws are in your favor if you are filing for bankruptcy. Can a bankruptcy affect my job or future employment? Many employers are now using credit scores and reports to make a decision on whether or not to hire a certain employee. An employer cannot deny you a job based on the fact that you filed for bankruptcy. Is this fair? If you feel that you have been denied a job based on your credit score or history of bankruptcy, you can file a complaint with the Labor board of your state.

No, it is not but employers do have a say when setting forth their hiring criteria.

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