So what exactly is bankruptcy?

Question

What happens when you go through it?

Answer 1

Congress created bankruptcy to give creditors a "fresh start." There are two types for consumer debt.

The first is a Chapter 7, where you get rid of your debt, and never pay it again. (You can keep your house and car if you don't have too much equity in them, as well as household goods and clothing, within the stated guidelines.) The laws changed last year for bankruptcy and it is harder to file a Chapter 7 now.

The second type if a Chapter 13, in which you pay a portion of your debt back through the court over time. Part of your wages are deducted and sent to the bankruptcy trustee for disbursement to your creditors. You might pay as little as 10 percent of your debt back to the creditor, but they'll get something with this type of case.

Once you file bankruptcy your creditors cannot call you or bother you to try to get you to pay them. They have to leave you alone, which is a great relief to many filers.

Many attorneys will give you a free consultation.

A bankruptcy of either type can stay on your credit report for up to 10 years after discharge. Most people can buy a car almost immediately after a Chapter 7, because creditors know you don't have debt anymore. After two years with clean credit after your bankruptcy discharge, you should be able to purchase a home (although you may pay a higher interest rate.)

Consult with a local attorney for all the facts.

Answer 2

Bankruptcy is filed in court when you have a large amount of bills and for some reason,medical, lay-off,or other circumstances you ca'nt pay the bills. The legal process will allow you to be released from the debt, but your record will reflect the bankruptcy for 7 years. I will say this will allow you to make a clean start,you will be a higher risk for lenders.

Answer 3

Bankruptcy is being drowned in to much debt without enough income. You will have the option to file either Chp: 7, 11, 13 and in some cases 12. All depending on your situation meaning your amount of debt. BASICALLY A GET OUT OF JAIL FREE CARD!!!!!!! But it will show on your credit for 7years. It may or may NOT stop your for getting approved for anything else in the future...

Answer 4

The court declares you can't pay off your financial obligations and your credit score goes down the toilet. The judge warns you if you go over your head in debt within the next 7 to 13 years, not only will you lose your house---but you go to jail as well.

Bankruptcy: it's a lose/lose situation for you; a win/win for attorneys on both sides.

Answer 5

The financial status of a firm that has been legally judged either to have debts that exceed assets or to be unable to pay its bills. Formal bankruptcy may result in reorganization and continued operation of the firm or it may require liquidation and distribution of the proceeds. In either case, most security owners, especially shareholders, are likely to suffer losses. Stock transaction tables indicate that a company is in bankruptcy proceedings by appending vi or q immediately before the name of the stock.

Answer 6

Your credit is screwed for 7 years after you file for personal bankruptcy, but it wipes out pretty much all unsecured debt. Consult an accountant or bankruptcy attorney for details.

Answer 7

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. A declared state of bankruptcy can be requested by creditors in an effort to recoup a portion of what they are owed; however, in the overwhelming majority of cases, the bankruptcy is initiated by the bankrupt individual or organization.

Answer 8

In simple word Bankruptcy is a federal court process that helps consumers and businesses eliminate their debts or repay them under the protection of the court. It can generally described as "liquidation" (Chapter 7) or "reorganization" (Chapter 13).

Answer 9

U have debt More than What can Own even u sell them all ( house, car, wife hehe kiding)
when u declare bankrupt u will be in a special condition. U cant buy car, or house or anything luxery, Only food and transport to work.
whatever u earn, almost 90% goto ur debtor until u pay them ALL!!!

Debtor (person u own money to in case u ask)

Answer 10

You look at what property you own, your debts, the institution you file with will determine what you get to keep and what you do not, what you pay to file and they basically eliminate your debts. The amount collected from you will then be distributed between those you owe money to. Most likely they will only get a very small percentage of what you actually owed them.