When many of us hear about bankruptcy, we consider the classic state of bankruptcy in the game of Monopoly. But a bankruptcy is not a game.
Bankruptcy is a completely serious state of financial affairs that can not be taken lightly. The Bankruptcy laws are extremely complicated, and even have bankruptcy service providers arguing about the real definition and intent of the complicated rules and procedures that have been put into place. You can check out these rules with Bolinske Law, LLC.
There are many types of bankruptcy, both for individual and company bankruptcies, and each type is different. The numerous types are designed to strike a balance between meeting the needs of the creditors without doing more damage than what is required for the individual who is submitting bankruptcy. This short article will describe the essentials of the type of bankruptcy typically known as Chapter 7 Bankruptcy, which is among the most popular types of bankruptcy.
Before we enter that, understand that applying for bankruptcy is not a decision that needs to be ignored. The big red flag stating that you have filed bankruptcy will certainly appear on your credit reports for the next 7 to 10 years. It will haunt you with being rejected credit as you try to reconstruct yourself or your company. In addition to being required to pay a greater rate of interest on credit for those lenders who want to “take a risk” with you. There are multiple alternatives to applying for bankruptcy, and each alternative must be fully thought about before you choose that bankruptcy is your only or best alternative.
Chapter 7 bankruptcy is the type of bankruptcy also known as liquidation, where the individual filing bankruptcy turns over all their possessions to be sold. The resulting cash is used to pay off or partly settle all lenders. The reason this can be appealing to some people is that if the individual filing bankruptcy has couple of assets to be sold off, the continuing debts are discharged over a duration of 3 to six months. It gives that individual a “quick start” to reconstructing their life without any financial obligations.
If you have a bigger quantity of assets that could be sold to pay your debts, you might wish to consider a different kind of bankruptcy. Since the majority of those assets will not be available to you after you file bankruptcy, and the procedures move forward. Likewise, understand that the bankruptcy laws differ, in some cases extensively, from state to state. Therefore, the bankruptcy laws in your state may be different and might even not allow you to declare this type of bankruptcy.… Read the rest