Bankruptcy?

Question

hi can anyone explain what going bankrupt means and whats involved.my friends father is thinking about doing this

Answer 1

The first step to filing bankruptcy will be to meet with an attorney to determine which type he will qualify for. There are 2 types of bankruptcy individuals typically file. The first, Chapter 7 (or liquidation) is what most people think of as bankruptcy. Basically every debt is listed on the paperwork and discharged except for those which the debtor wants to keep (as long as he is current) and those which are nondischargable, which include debts entered into by fraud (like bounced checks), child support, recent back taxes and student loans. He could reaffirm (keep property and pay for it) certain debts, like a house or a car, assuming he is current. This is a contract between the creditor and the debtor stating that he can keep the property and debt as if he had not filed for bankruptcy.

The second type of bankruptcy, Chapter 13, is what most people think of as reorganization. It is a 3-5 year program whereby secured creditors are paid back 100% and unsecured creditors are paid back a portion based on income, expenses and nonexempt property, if any, as well as other factors. In order to fund this type of bankruptcy, your friend's father must have income sufficient to fund a plan, or a monthly payment to the trustee. The trustee will then distribute the money to the creditors and, in most cases, to your attorney.

There is a lot more involved in filing for bankruptcy now that there was prior to October 2005. It is imperative that your friend's father find an attorney he can trust. The initial meeting (consultation) should be free and he should be allowed to ask general questions to better understand the process. The attorney should be able to tell him whether he qualifies for a chapter 7 or if the Chapter 13 would be in his best interest, at this meeting.

Good luck to him.

Answer 2

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Answer 3

Bankruptcy is when your debts exceed your income or assets.
When someone reaches a state where their income is no longer sufficient to meet their obligations (like when a couple has both been working, incurred debts then one gets laid off or injured) then bankruptcy can be filed.
The court then takes all the persons assets except home and 1 vehicle (or used to) and liquidates them. The court pays off all the debtors with the proceeds (sometimes debtors receive nothing or pennies on the dollar)
Their assets are gone but their debts are cleared and all charge accounts and credit cards are shut down.
The person must 'start over' credit wise.

Answer 4

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RE Bankruptcy?

hi can anyone explain what going bankrupt means and whats involved.my friends father is thinking about doing this

Answer 5

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Answer 6

It means going to the court and being discharged of all your debts, or setting up a payment plan. It also means you will be on the bad credit list for 10 years

Answer 7

Bankruptcy?

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