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Bankruptcy Assets – What Happens to Your Assets After You Have Declared For Bankruptcy?

Article by Jeremy Edwards

For most people who are burdened with debts and are unable to pay off their financial obligations, the only legal option left is filing for bankruptcy. Most people however are concerned about what happens to their assets after bankruptcy.If you are facing bankruptcy, you need to understand the difference between the two most common types of bankruptcy to know what how the court will handle your assets. If the court grants you a Chapter 7 bankruptcy, then most of your debts will be forgiven although there are some financial obligations that you will still be required to pay. This includes your student loans, child support and alimony and other penalties that the court may impose on you. In order to pay off these obligations, the court may require your to sell some of your assets or decide to forfeit your assets after bankruptcy to pay for your remaining obligations.If the court grants you a Chapter 13 bankruptcy, your debts are not eliminated, but instead you are given the chance to restructure your loans or to work out a payment schedule with your creditors. Usually, you are allowed to settle your debts in a period of 3-5 years. This means that your assets after bankruptcy stay safe and the court can not forfeit nor sell your assets to pay for your financial obligations. You just need to present a payment plan to your creditors, which of course, you would have to comply with.In other words, if you prefer to get most of your debts pardoned, then filing for bankruptcy (Chapter 7) is the right move, but be prepared for the possibility that some of your assets will be forfeited to pay off some of the debts you owe. However, what usually happens is most people who are at the brink of bankruptcy no longer have valuable assets in the first place. Often the assets have already been sold prior to filing for bankruptcy or the remaining assets are just not that valuable.What worries most filers, however, are the two assets that are usually the only ones left during a financial downfall – their home and their car. You need to be aware that every state has a homestead exemption, which protects your home from being forfeited in the event of bankruptcy. Check out the limits in your state for the homestead exemption so that you would know whether you qualify or not.Although it does not completely wipe out all our financial obligations, filing for bankruptcy is still a good option that will provide you a fresh start financially. Work your way up again to a better credit rating, be a better borrower and be more conscious of your spending habits to make sure that you will not fall into the bankruptcy trap again.Get information on Bankruptcy Assets and how it affects you. Find out the facts on Declaring Personal Bankruptcy before you proceed.More Bankruptcy Information:Bankruptcy Assets – What Will Happen To You?3 Reasons To Delay Declaring Personal Bankruptcy

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Find out more about declaring yourself bankrupt and what are the considerations you should take note of.

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