What happens when you file for bankruptcy?

Question

Is it true that if you do file for bankruptcy they will come and take your stuff?

Answer 1

It depends on if it is chapter 13 or chapter 7. chapter 7 wipes out all bills chapter 13 is a repayment plan.

Answer 2

It depends on if you file chapter 7 or chapter 13.

When you file chapter 7, all of your debts are wiped out. However, you generally have to give up some things like your car or house. It stays on your credit any where between 7 and 10 years. You will not owe anything except for legal fees.

When you file chapter 13, you pay back a small portion of what you owe. Depending on how much you owe, it can be cut down to you only oweing 25-50% of your debt. You will then be set up on payment plan, either 3, 4, or 5 year. It will be deducted our of your paycheck until your bankruptcy is paid. You get to keep your car, house, stuff, etc.... This stays on your credit 7-10 years.

If you must file, I would recommend chapter 13 if you can afford the payments. Chapter 13 doesn't look as bad on your credit as chapter 7.

Answer 3

Filing for bankruptcy is not simple. There are many factors to take into consideration, including lifestyle changes. Oftentimes, people filing for bankruptcy fear that they will not be allowed to keep their possessions and will end up losing all or most of their valued belongings.

Even though every bankruptcy case has to be evaluated separately, it would be safe to say that in most cases the debtor does not have to give up their property or possessions. The reason for this is that the law allows a comfortable amount of property exemptions. During and after the closing of the bankruptcy case, the exempted property is protected by law. In fact, exempted property allows you to keep not only the property that belongs to entirely to you but also the equity that you might have on the property. Equity means the difference between the value of your exempted property and the remaining debt.
Even within exemptions, there are a number of different points to keep track of. According to bankruptcy law, each state has the right to determine which kind of exemption, federal bankruptcy exemption or state exemption, should be applied to you. Some states allow you to make the choice between the two. In most cases the federal bankruptcy exemption would prove to be better for the person filing for bankruptcy. However, there are cases when the state exemptions might be more beneficial.

Whatever the choice you make as the person filing for bankruptcy be sure you are acting on the advices of an expert. To understand which type of property exemption would apply to you, it is important that you talk to a qualified bankruptcy attorney. Moreover, these processes have legal implications so you need to make sure you are doing the right things.

Answer 4

They may take some of you belongings and may not. For instance if you're including in your bankruptcy your car, and it's worth nothing they won't bother with it. On the other hand, it depends on what chapter you're filing for. If it's personal bktcy (as opposed to business) you have 2 main chapters: Chapter 7 will clean up all your debt, chapter 13 will not clean it up, meaning that after it's discharged you still have to pay the creditors on a set plan.
Contrarily to what people say, it is not all that hard to get back on your feet. It will take 6 to 12 months to get your first credit again but a couple of yrs down the road you can find yourself in a home owning it. Just make sure that when you do get new credit to be very careful on your spendings, such as don't go crazy on charging your credit cards, every time you go over 50% of any of your cards' limit your credit score (Beacon) will go down a little. Every time you apply for something it will go down a little (unless you're applying for the same thing within a few weeks period)...If after a year to two yrs you've shown that you're doing ok on your credit, you bnktcy won't be much of a factor.
Any questions please don't hesitate to ask :)
Good luck.

Answer 5

The laws have currently changed. Now when you file bankruptcy, you will have to make arrangements to repay the unsecured debts. All of the Visas, Master Cards, Discover Cards, and American Express Cards. If you have a Sears Card, they will take the items back you have purchased, like any T.V.'s, or things of this nature. It will stay on your credit for 10 years now. But if you want credit later on you will still have to check that box on the application that asks: Have you ever filed Bankruptcy before? So it really stays with you for the rest of your life. If you are having real financial problems, you can call your creditors yourself and tell them that you want to close the account and make payment arrangements yourself, and ask them to stop the interest and the late charges. Figure out how much you can pay each one each month and don't be late on paying them. Most creditors will work with you if you are straight up with them.
Good Luck

Answer 6

It depends upon what kind of 'stuff' you have. Some assets are exempt and you get to keep them. Others are not and you have to have them considered as part of your asset basis when determining your net worth, or liquidate (sell) them. After all, the only reason you are considering bankruptcy is because you are insolvent; you liabilities total more than your assets. Actually bankruptcy occurs after insolvency and when one can not cash flow the obligations, but that is another road we will not take right now.

In general you get to keep a house, your car, basic furnishings within the house, (but not to excess), and other lesser assets accumulated. However, if someone has collected a certain commmodity, say antique furniture, and has a barn full of it, then it is no longer considered household use furniture, rather a liquid commodity.

Hope this makes sense and is of help.

Answer 7

You may legally keep some of your assets, and other assets are up for grabs. It's important to see a lawyer regarding just what you can keep. (You can usually keep your car [if it's not worth a whole lot] and "x" dollars worth of your personal assets.) Also, there are SOME debts that you cannot wipe away with a bankruptcy (tax debts, child support, etc.). This is why you should always see a lawyer to consider all of your options. For example, did you know that there are two forms of bankruptcy, and that one is more-severe than the other? There are lawyers who specialize in bankruptcy, and some of them do it "on the cheap" for poor folks, so call up a few lawyers before you think this thing through any further.

Answer 8

I filed for bankruptcy about 2 years ago.. I let my house go into forclosure and filed all of the debt that my ex husband caused for me. Now i basically have bad credit, and i was advised to get a credit card and spend a little and make minimum payments to build my credit again. It's 2 years for a chapter 7. If you file chapter 11, it's 7 years of no credit. Ask a lawyer. (Incase I am wrong..) No, nobosy will take your things, but you will have to put everything you own on paper.

Answer 9

Each state has their own laws regarding this subject. Basically, you can keep your home if you choose and erase all other debt. It's best to have a list with all of your debt, income and expenses- remember to include daycare and or child support. The bankruptcy stays on your credit report for seven to ten years and after you are discharged you will be blowed away with offers to reestablish your credit- generally with a yearly fee and high interest. Employers and potential landlords generally pull your credit report to get an idea of your character, responsibility level- insurance agencies even pull your credit report. If they see a bankrupcy they may give you higher rates or not insure you. Good credit can be rebuilt but it takes time and alot of work. Consider your options carefully- you can often work out payment arrangements with your creditors. They would rather lower your payments, fees, and interest rates than for you to declare bankruptcy and them get nothing.

Answer 10

I do home loans and they can take things that have been secured by credit (car, furniture etc.) but the creditor has to show up in court at the creditor hearing.

Most of all, and listen very careful, make sure you don't forget to file on everything. Medical bills, credit cards and vehicles. Then, after you've completed the full process and it's been discharged, start trying to rebuild your credit immediately. Get a secured credit card, pay your rent on time. This will take several years, but it can be done. Credit is so important to your future. It will affect your interest rate on a home loan, but with proper care you can recover. GOOD LUCK!!!!!

Answer 11

After you file bankruptcy, it stops people you owe money to from collecting. Its called an automatic stay. An automatic stay is basically a court order that stops anyone you owe from collecting. All your creditors will be served a court order once they get the order of the court it forbids them from collecting. That means the Tax Man, your Landlord, and any company from repossessing your stuff. For more details check out the site below…..