Borrowers who choose to solve their debt problems by declaring themselves bankrupt need to fully understand the effect bankruptcy may have on their property and assets. Even though bankruptcy is not a very pleasant experience to go through, it may have some desirable effects on the borrower; especially mortgage borrowers.
Mortgage borrowers, who owe so much money on their mortgage loans and cannot pay back these loans, may find solace in bankruptcy proceedings.
This is because when a borrower declares him or herself bankrupt, the borrower is freed of some loan obligations that are covered by the bankruptcy law. However, all other debt that is not catered for by the bankruptcy law must be paid.
When filing for Chapter 7 bankruptcy, you are choosing the liquidation option. A trustee of the district court who is in charge of handling your case is empowered by the court to seize your non-exempt assets and sell them off.
A lot of people who file for bankruptcy are under the impression that they will “lose everything,” but this is not the case. A lot of people won’t lose anything at all. It depends on what you own.
When you declare bankruptcy, what happens to your bills? This is one of the biggest questions that most people have about bankruptcy. After all it’s your bills which are causing you so much trouble. Will declaring bankruptcy really eliminate your bills, or will you still have to pay on some things?
Thinking of filing for bankruptcy in order to try and deal with a foreclosure situation? Bankruptcy shouldn’t be your first thought, but it shouldn’t necessarily be your last one, either. Declaring bankruptcy might save your house or it might not, but it can give you a cleaner slate.
Will all your debts be discharged? Not necessarily. Will you lose everything? Not necessarily. There are a lot of myths surrounding the bankruptcy process, but with some research you should be able to understand what outcome you might expect from declaring bankruptcy in your state.
What happens after you file for bankruptcy? Contrary to common sentiment, your life doesn’t end. Bankruptcy is intended to be helpful—to help you get a fresh start after accumulating more debt than you know what to do with.
The two types of bankruptcy which most consumers file are called Chapter 7 and Chapter 13. Chapter 13 re-organizes your debts and consolidates them into one lump sum you have to pay off every month, and then allows you to allocate the rest of your income each month into whatever you want (food and rent, presumably—maybe even your mortgage if this allows you to save your house).
If you are thinking about filing for bankruptcy, you’ve probably heard a lot of people say that you’re going to “lose everything.” If this is frightening you, you’ll be glad to learn that it is a myth. You won’t lose everything—though if you file for Chapter 7 property you will lose all non-exempt property.
This may mean your house and car or it may not, depending on your financial resources and what kind of a solution you can arrange with your lenders.
Filing for bankruptcy is an intimidating decision, and one aspect which is particularly intimidating to many people is the involvement of the district court in the process. A lot of people feel uncomfortable with the idea of appearing before a judge in court.