Personal Bankruptcy Help

Personal bankruptcy filing can be interpreted as a legal process available to an individual who is financially in debt, and is not able to repay the creditors. It's possible for an individual to file for bankruptcy and seek to legally eliminate or reduce some or all of outstanding debts. As per the straight bankruptcy law or Chapter 7 bankruptcy, the objective is to liquidate all possible assets owned by the debtor to clear the outstanding amount. In this particular statute, it's possible for the debtor to claim certain property as "exempt", and retain it to avail and maintain the basic necessities of life such as equity for home, car, personal clothing, and other assets, which can be interpreted as "basic necessities of life". Once an individual declares bankruptcy, he or she can avail the personal guarantee bankruptcy benefits, but cannot be discharged from debts for the next six years.

Types of Personal Bankruptcies

Chapter 7 Bankruptcy

It is the specific chapter of the Bankruptcy Code, which addresses liquidation of an individual's personal assets. Chapter 7 bankruptcy is specially designed to discharge some or all of the unsecured debts of an individual, and offer creditors a certain compensation by liquidating some or all of the debtor's non-exempt property.

Chapter 13 Bankruptcy

This chapter of the Bankruptcy Code addresses the financial rehabilitation for an individual having a proven income, and who can repay the majority of the debts incurred. Chapter 13 bankruptcy is structured to give an individual a fresh start by allowing a rescheduled or reorganized monthly repayment plan that is suitable to all the parties involved and affected.

Which Personal Bankruptcy to choose?

As per the new bankruptcy laws, if the debtor decides to file personal bankruptcy, it would be difficult for an individual to file for Chapter 7 if his or her income is more than the median specified for that state. So majority of the individuals are expected to file for Chapter 13 bankruptcy option.

According to the Chapter 13 bankruptcy, referred to as "wage-earner plans", all the assets belonging to the debtor are not liquidated. Instead, all the fines, interest amounts, and late fee and charges are eliminated, and special arrangements are made to redeem some, or all of the debts owed over several years. Bankruptcyonly can help the debtor in understanding personal bankruptcy rules, and deciding upon which personal bankruptcy to file for.

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Filing for Personal Bankruptcy

The main questions asked by the debtor while filing for bankruptcy are:

• Is filing personal bankruptcy the right decision?
• Are all the debts dischargeable?
• Does one desire to eliminate all debts, or only some of the debts?
• Is it cost effective to file for bankruptcy?
• What if one experiences more financial problems in the future?
• How will work and professional life be affected?
• What kind of personal bankruptcy law should one consider?
• Finding a good bankruptcy lawyer.
• Filing in the proper U.S. bankruptcy court.