When the word bankruptcy comes up, most people think of Chapter 7 Bankruptcy, also known as “straight bankruptcy”
Many people think of this as a quick fix, although if they file for chapter 7, they later find themselves full of regret and resentment; (to find out about the effects of bankruptcy click here)
An individual who files for bankruptcy can retain assets that are considered exempt assets but a court can require that person to liquidate the value of non-exempt personal belongings. An individual may have to repay a creditor with collateral such as, house, car, or land which was used when the individual secured the loan. (to find out more about Debt Consolidation Loans click here)
Limitations of what personal property is exempt varies from state to state, although chapter 7 does provide sufficient protection for most assets.
Discharge is the term used when a court formally dismisses your case and removes your legal liability to repay creditors. Discharge usually takes between 3 to 5 months if everything runs smoothly. There are many times when a bankruptcy filing does not occur smoothly. A creditor reserves the right to file an adversary proceeding if they feel that a claim is non-dischargeable.
Typically, a creditor will file a proceeding against claims involving criminal conduct, such as debts incurred on the basis of fraud or theft, embezzlement or breach of trust, or debts from willful or malicious injury to another person or their property.
The creditor may also file a proceeding against damages from drunk driving responsibility. Credit card fraud can also include signing up for a credit card, loading up within a short period (12 to 24 months) and then filling. Do not expect creditors to just roll over; they often put up a good hard fight.
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