Personal bankruptcy FAQ
Personal Bankruptcy is a process in which an individual or an organization avoids paying up their personal debts permanently or temporarily. Now when a person decides to file a request for a bankruptcy then there are several questions on his mind which need to be cleared and many words like, when, why, how, and others need to be answered. Some of these questions are known as Frequently Asked Questions.
They are mentioned below with their importance.
- When to file a bankruptcy : One should only file a bankruptcy if one is not able to clear all the dues in time and are not able to clear the dues in the near future.
- Risks involved: One can be at high risk when ones credit card limits have exceeded the given limit or is consistently in a late payment zone.
- What is Chapter 7 : Under this law it is stated that the debtor is released from all personal liabilities by giving the case to the trustee and the trustees work is to change the assets into real money and distribute it to the creditors or the lenders according to the shares they posses.
- What is Chapter 13 : Chapter deals with the plans made by the debtor to pay back the taken loan in the period of three to five years. This plan depends on the value and the kind of income a debtor presently has.
- How often can one file bankruptcy: As per the rule of chapter 7, one cannot file a case within a time of six years but according to chapter 13 one can file a case anytime they want to.
- Till when does bankruptcy last : Bankruptcy can lasts for years or may go more than a year depending upon the bankruptcy order. The court can increase the time limit for any years if it feels unsure of the debtors status to pay back the debt.
- Main changes in the recent past: Many changes take place within a year so one should keep on upgrading ones knowledge.
- Will a person get credit again : The answer to this question is yes, and bank prepares a secure credit card for all these kinds of debtors.
- Who will keep record about my case : The filing of such cases gets recorded into public records and anyone is allowed to look at any persons bankruptcy record.
- Alternatives to bankruptcy: One has many options if not want to file a bankruptcy case like he can negotiate the deal by talking to his creditors and also go for debt counseling.
- Waiving of the student loans: Yes the student loan can be waived off if the loan does not have a guarantee from a government institution.
- Does it require going to court: Going to the court is only necessary when the proceedings are being held.
Many Frequently Asked Questions are there which need to be clarified by the government so as to have a clear and safe deal. These questions are also mentioned with their full description over the internet in many web-sites.
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