Personal Bankruptcy – What You Should Know Before Filing for Bankruptcy

personal bankruptcy

Personal bankruptcy is a legal process for individuals who are unable to pay their debts. It is a way to eliminate debts and protect your property from garnishments and wage deductions. However, there are a few things that you should know before you file for personal bankruptcy. First of all, you need to understand that personal bankruptcy is different from corporate bankruptcy.

Chapter 7 bankruptcy discharges only debt obligations

If you are unable to pay your bills, bankruptcy may be the answer. It will eliminate most of your unsecured debts, including credit cards and medical bills. However, it will not discharge some types of debt, such as student loans and child support. A bankruptcy filing will also leave a hefty mark on your credit report for 10 years. As a result, you may find it difficult to obtain new credit for a few months after filing. If you’re able to pay off your debts, however, your credit score will likely recover in a few months.

Debtors who file for Chapter 7 bankruptcy can have the option of voluntarily paying off one or more of their debts. The process is known as reaffirmation, and it involves the debtor agreeing to pay back a certain portion or all of the debt that is owed. In exchange for this option, the creditor agrees not to repossess any of the debtor’s property.

Chapter 13 bankruptcy protects property from wage garnishment

If you’ve ever wondered how Chapter 13 bankruptcy protects property from wage garnishments, you’re not alone. A successful Chapter 13 bankruptcy will give you time to catch up on past-due debt and protect your property from repossession. The repayment plan is structured to allow you to pay off your debt over three to five years.

In addition to protecting your property, Chapter 13 will also prevent wage garnishment of public benefits. This includes Social Security, disability benefits, public assistance, veteran’s benefits, supplemental security income, and unemployment compensation. In addition, you may be eligible to receive railroad retirement benefits, workers’ compensation, or life insurance benefits. The personal property exemption, on the other hand, only protects certain types of property.

Non-dischargeable debts

When you file for personal bankruptcy, it is important to keep in mind that certain debts are not dischargeable. For instance, child support and alimony obligations cannot be eliminated. However, if you are behind on either of these obligations, you may still be able to file for Chapter 13 bankruptcy.

In personal bankruptcy, non-dischargeable debts are debts that you cannot discharge without a creditor’s challenge. Once a creditor files a challenge, the bankruptcy court will hold a hearing and decide whether or not the debt is dischargeable. Examples of non-dischargeable debts include debts obtained by fraudulent means or incurred as a result of bad behavior on the part of the debtor.

Costs of filing for personal bankruptcy

Filing for personal bankruptcy can be a complicated process. Legal fees, court costs, and mandatory credit counseling can add up to thousands of dollars. Knowing what to expect before filing is vital for your financial health. A bankruptcy attorney can help you determine the best course of action. However, a bankruptcy attorney can also be expensive. Depending on your circumstances, you may be able to file for bankruptcy yourself to save on costs.

There are two basic types of bankruptcy. The first is called Chapter 7 bankruptcy and is much cheaper than Chapter 13. The second type, called Chapter 11, is generally used by businesses. Both types require attorneys and court fees. Federal bankruptcy courts charge standard court fees and administrative fees, but can waive some fees for people in financial need.