Individuals who file for bankruptcy typically have the option between Chapter 7 and Chapter 13 bankruptcy. According to statistics, the majority of individuals file for Chapter 7 bankruptcy. Under Chapter 7, the court will liquidate certain assets and distribute the proceeds to the debtor's creditors. In exchange, the debt to the creditors will be considered satisfied.
However, if the individual has a stable job and income, he may elect to file under Chapter 13. The benefit of filing in this manner is that the individual's assets will not be liquidated. However, he will be required to engage into an agreement with the courts to repay his debts within a maximum of five months. With either form of bankruptcy filing, the bankruptcy will appear on the credit report.
Your attorney will inform you of what you must bring to your court date. In most cases, however, you will be required to provide evidence of your current assets, income, expenses, and secured and unsecured obligations. This includes tax returns, utility invoices, bank statements, credit card bills, mortgage documents, etc. Ensure that you bring everything so that the court has all the information necessary to decide your case.
When an individual files for bankruptcy, he or she hopes to get a new start by having all of their debts discharged. Certain obligations, however, are typically not dischargeable by the courts. For instance, it is extremely unlikely that delinquent taxes will be discharged. Also unlikely is the discharge of child support debts. Before initiating individual bankruptcy proceedings, it is prudent to consult a counsel. After reviewing your financial information, he will have a decent idea of what debts will remain after the bankruptcy is discharged.
If the court grants your petition for bankruptcy, it will determine which of your debts will be discharged and which will remain on your credit report. Additionally, the court will inform your creditors of your bankruptcy status. Additionally, the court will determine which of your assets you may retain. The non-retainable assets will be sold or auctioned to generate funds for the creditors. The items you can and cannot retain vary by state. Your bankruptcy attorney can provide you with state-specific information.
The decision to apply for bankruptcy is difficult. Due to the stigma associated with it, many individuals have a morbid fear of bankruptcy. In many instances, however, it is the best decision - both financially and psychologically.""
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