When filing bankruptcy for the first time, people have many questions. A bankruptcy FAQ can explain simple and basic concept of bankruptcy such as how to file bankruptcy, what types of bankruptcy can a person file, and how much it costs to file bankruptcy. A bankruptcy FAQ often discusses chapter 7 bankruptcy and chapter 13 bankruptcy in detail.
The first question that comes to people’s mind on the subject of bankruptcy and often the first question in a bankruptcy FAQ is how to file bankruptcy. Knowing how to file bankruptcy properly will avoid many problems that can result on a legal standpoint. The first step of filing bankruptcy is to file a petition and then pay all the needed fees such as administrative fees and the filing fee.
A person needs to know that there are many types of bankruptcy not just one. A bankruptcy FAQ often introduces chapter 7 bankruptcy, chapter 13, chapter 11 as well as chapter 12 with more emphasis on chapter 7 and chapter 13 for individual bankruptcy filing and chapter 11 for business filing. It is important to file a petition for the right type of bankruptcy.
Most people consider filing chapter 7 bankruptcy first and foremost because they have been told that chapter 7 bankruptcy eliminates most of the debts. However, the new bankruptcy laws have made it more difficult to file chapter 7 bankruptcy. Added to the fact that many people want to keep some assets, they opt for filing for another type of bankruptcy.
Chapter 13 bankruptcy is often the highlight of a bankruptcy FAQ because it is the most common type of bankruptcy filed nowadays. In a chapter 13 bankruptcy, debtor filing chapter 13 comes up with a repayment plan that the court approves to pay off most of the debts to the creditors. Some debts are discharged but most are not.
The cost of filing bankruptcy is also one of the most common question in any bankruptcy FAQ. It generally costs only a couple hundred dollars to file bankruptcy including the court fees and administrative expenses. However, many people hire a bankruptcy lawyer to help them therefore increasing the cost of filing many fold.
Most people file bankruptcy because they want the debts to be dismissed. However, people are always surprised that many of the debts are not discharged afterall. Bankruptcy laws detailing what debts are discharged are quite complex. Taxes, for example, are usually not discharged with either chapter 7 or chapter 13 bankruptcy.
Overall, most people find information in a bankruptcy FAQ useful, especially for anyone new to filing bankruptcy. It is important to learn as much as possible about how to file and what to do as well as decide if filing bankruptcy is the best choice for a your financial situation.