Whenever someone is thinking of filing bankruptcy, a good place to start learning about bankruptcy is the bankruptcy FAQ. A bankruptcy FAQ usually outlines basics information about how to file bankruptcy, different types of bankruptcy such as chapter 7 bankruptcy or chapter 13 bankruptcy as well as common questions that people ask about the subject.
The most common question about bankruptcy in any bankruptcy FAQ is how to file bankruptcy. While there are different steps required when filing different types of bankruptcy, anyone seeking to file bankruptcy will first file a bankruptcy petition and pay the filing and administrative fees of course.
A person needs to know that there are many types of bankruptcy not just one. A bankruptcy FAQ often introduces chapter 7 bankruptcy, chapter 13, chapter 11 as well as chapter 12 with more emphasis on chapter 7 and chapter 13 for individual bankruptcy filing and chapter 11 for business filing. It is important to file a petition for the right type of bankruptcy.
For anyone with lots of debt, filing chapter 7 seems like the best idea and a bankruptcy FAQ will explain why. Most debts are discharged when a chapter 7 is filed however not all. The major drawback of filing chapter 7 is that almost all assets of the filer are liquidated and proceeds used to pay off debts. There are certain assets that are exempt but most people will lose all their assets in the process.
A bankruptcy FAQ will not fail to mention chapter 13 bankruptcy in detail. Chapter 13 bankruptcy is all about repayment plan. In stead of putting all assets at the disposal of the bankruptcy trustee to liquidate and then pay creditors, debtor can come up with a repayment plan and keep the assets. Debtor seeking chapter 13 bankruptcy will have to prove that he/she has enough income to pay creditors.
The cost of filing bankruptcy is also one of the most common question in any bankruptcy FAQ. It generally costs only a couple hundred dollars to file bankruptcy including the court fees and administrative expenses. However, many people hire a bankruptcy lawyer to help them therefore increasing the cost of filing many fold.
Different types of debts are discharged differently. It also depends on the type of bankruptcy filed. The bankruptcy laws have so many provisions and interpretations and each debt is considered separately. A bankruptcy lawyer can help you interpret if a debt will be discharged by the filing or not.
There are so many questions about bankruptcy that a person seeking to file bankruptcy needs to know. A bankruptcy FAQ should give an overview of filing bankruptcy as well as answers important questions that most people have encountered. Do not file bankruptcy if you have other options.
