Things To Know About Bankruptcy

Excessive debts and foreclosures are nightmares that most homeowners hope to never have to contend with

. For some people, bankruptcy offers a way of getting themselves out of the financial mess that they are in. Before you decide to file, you need to know how the process works.

If you are faced with any type of financial insolvency, the final option you should think about after all other avenues have been exhausted is bankruptcy. It is the only legal means you have for eliminating the monetary setbacks you are facing.

When you file, you must explain to the trustee or in some cases the judge involved with your case, how you got yourself into such a mess with your finances. You will be expected to file a complete list of all of your assets and outstanding debts with the bankruptcy court.

Types of Assets

Assets are divided into two separate categories. There are exempt assets and non-exempt ones.

The exempt assets are the ones that cannot be taken to pay back the debts you owe. Examples of these would include your motor vehicle, personal belongings, and some parts of equity that you have in a house. Non-exempt assets are those that can be seized and sold in order to pay down or pay off the outstanding accounts you have. Any recreational vehicles you possess would fall into this category, as would boats, motorcycles and home property you own other than your primary residence (such as a summer cottage).

Types of Debts

Just as assets fall into two categories, so do debts. There are secured debts and unsecured debts.

Secured debts are loans on property that a creditor has security interest in that can be used as collateral. The property that was purchased with credit may be a boat, automobile, motorcycle, or a second house. The unsecured debts are not secured by just any type of property. Examples of these would be debts on credit cards, medical bills, and personal unsecured loans.

The bankruptcy court that you must deal with looks at secured debt as vitally important. It does because of the fact that non-payment of the debt will cause the creditor to lay claim to whatever property you have used as collateral.

Once all of the necessary information has been filed with the court, a trustee will be assigned to your case. It is this person's job to ensure that the secured debt that you have is repaid in a given time period.

The court will issue what is known as a mandatory stay. This stay prevents any of your creditors from getting a hold of you by way of foreclosure or the confiscation of property. The stay also accomplishes another important function when you are going through a bankruptcy- it prevents any of your creditors from filing a lawsuit against you.

by: Abraham Avotina

POST COMMENT

Bankruptcy Attorney- A Great Help During Bankruptcy! Help From A Bankruptcy Lawyer For Financial Crisis Questions About Chapter 7 Bankruptcy You Should Ask Your Lawyer An Important Question With Bankruptcy Filing Answered Looking For A Bankruptcy Attorney To Help With Your Debt Stress? Reasons To File For Chapter 13 Bankruptcy Take Advantage Of California Bankruptcy Attorneys Prior To Revealing Bankruptcy All About Chapter 13 Bankruptcy Hire A Bankruptcy Lawyer. Get Rid Of Your Debts. Bankruptcy Attorney Advice To Prospective Clients Get An Appropriate Bankruptcy Lawyer How To Choose The Right One Amongst All Tacoma Bankruptcy Attorneys Manage Your Debt Absolutely: Bankruptcy