Are you considering filing for bankruptcy? Before you do, you should know what exactly it will mean for you and your family if you do. Here are some questions that you need to ask your lawyer. This article provides some general answers, however your lawyer will be able to give you greater details and advice to suit your particular position.1. What does Chapter 7 Bankruptcy mean?Under Chapter 7, the person in debt hands over to the trustee the assets that are non-exempt. These are then liquidated and used to pay the creditors. Within a very short time, usually a few months, the debtor is cleared of all his debts. This gives the debtor a ‘fresh start’. The very purpose of bankruptcy laws is to give honest debtors a chance to make a fresh start. 2. What are some of the most common reasons for Chapter 7 bankruptcy?Unemployment and huge hospital bills often cause a person to become over burdened by debt. Large and unexpected expenses are also causes for filing under Chapter 7. 3. When is Chapter 13 bankruptcy filed?This type of bankruptcy provision lets the debtor pay off his or her debts over a period of a few years. Those who have non-exempt assets and want to keep them usually need this kind of bankruptcy petition. Also, if the court thinks that your income residue over and above your living expenses can be used to pay your creditors, then you will need to file this kind of bankruptcy.4. Will my creditors get off my back?Yes. Once you have filed form bankruptcy, it becomes illegal for your creditors to harass you for money. They cannot start or continue any lawsuits against you or even make telephone calls asking for payments. 5. Will my spouse be affected?Your spouse will only be affected if they have made signatures on purchases that are responsible for your debt. 6. Which of my assets will I lose?You will lose the assets that are considered non-exempt.7. Can all kinds of debts be cleared?No. Most debts that are unsecured can be cleared. However debts such as alimony, student loans, child support, debt incurred with the income tax department and debts caused due to personal injury that you may have been responsible for. 8. Is it possible for me to lose my home?Yes, you can lose your home as it will be considered a non-exempt asset. However Chapter 13 bankruptcy will let you keep your home but you will have to pay your creditors over a period of time. 9. Can my creditors object?Yes. Under chapter 7 your creditors have 60 days within which to come up with any objections. If there are objections, there may be a trial. Under Chapter 13, the creditors may object to repayment plans. 10. Can I apply for credit again?That is up to your creditors. There is no law that can stop you from applying for credit again. Make sure that you get as much information as you can from your bankruptcy lawyer. Scottsdale has many legal practitioners you can turn to if you are unsure of where to look for advice. Once you have all the information you need, take their help to get rid of your hopeless debt and regain your peace of mind.
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