Did you know that most people have heard of the term "bankruptcy" but really have no idea what it entails? Hopefully we can stay out of debt so that we don't have to learn too much about it, but sometimes it is necessary that we go through it.
This could be because of poor financial decisions, or just bad luck.
Whatever the reason, the more you know about the process and the event, the better prepared you can be to take care of it when it comes up.
Here are a few commonly asked Bankruptcy Questions.
How do I know if I should file for a Chapter 7 or a Chapter 13 Bankruptcy? This is a very common bankruptcy question and it totally depends on your current financial situation and your ability to make payments.
If you are a residential homeowner and have a steady job and income than you probably will have to file for Chapter 13.
This is for people who can still make payments but have just become so caught up in debt either from their mortgage or credit card debts that they cannot pay it all off.
Typically in these situations people are required to settle and make payments for three to five years before they are forgiven their debts.
They usually also get to keep their house and are kept under supervision by the U.
S.
court.
Chapter 7 bankruptcies would involve people who don't have a steady income or house.
These people are subject to the court selling anything that could be considered an asset to help pay off the debts but then are forgiven their further debts.
The only debts they would still be liable for would be child support, alimony, student loans, and taxes.