People who are considering bankruptcy will, understandably, have a lot of questions about how the process works and what bankruptcy can ultimately do for them. Today, we would like to answer some of those frequently asked questions so that people who are in dire financial positions can better understand what bankruptcy could do for them.
One of the most common questions is “how much of my debt will be eliminated during the bankruptcy process?” This greatly depends on the circumstances of your case and which type of bankruptcy you file for. Chapter 7 will utilize the liquidation process to clear out many of your debts, but this of course requires some of your assets to be sold. Chapter 13 will use a repayment plan to reorganize your debts, allowing you to pay back your creditors over a longer period of time.
Another common question is “how do I get my creditors to stop harassing me?” When you file for bankruptcy, an automatic stay is ordered. This requires your creditors to stop contacting you, and if they persist, you should discuss the matter with your attorney so that you can take the appropriate action to halt their harassing behavior.
Last but not least, many people are concerned about their property and assets during the bankruptcy process. While some of them may be sold through liquidation, there are exemptions that can be utilized to protect your most valuable assets, such as your home and car.
Source: FindLaw, “Bankruptcy: Frequently Asked Questions,” Accessed March 26, 2018