What Assets Have to Be Listed in Personal Bankruptcy?
When a person accrues more debt than he can handle, he may consider declaring personal bankruptcy. With two kinds of personal bankruptcy to choose from, Chapter 7 and Chapter 13, he has two distinctly different ways of settling his debts.
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Chapter 7 Bankcruptcy
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In Chapter 7 bankruptcy, the filer must disclose all of her assets to the court, including but not limited to any property owned, vehicles, personal possessions, bank accounts, insurance policies, and other assets. These assets are given to a trustee to control. Non-exempt assets are sold. If the filer has no assets, she will be determined to be a no-asset case and the debt will be discharged.
Asset Exemptions
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Exempt assets are not forfeited. Currently, each state has its own list regarding assets that are exempt. If the filer wishes, he can follow the federal exemption guidelines instead.
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Chapter 13
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Chapter 13 bankruptcy is an alternative to Chapter 7. The filer maintains all of her assets, but must have a regular income, with unsecured debt of less than $307,675 and secured debt of less than $922,975. She files a bankruptcy petition and gives the court a list of liabilities, assets, current income, expenses and a form stating other financial data. A payment plan is arranged with an appointed trustee who ensures creditors are paid. Payment plans are arranged to be paid off typically within three to five years.
Protection
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Bankruptcy protects the filer from public utilities, such as electricity, terminating service. Bankruptcy also protects him from collection attempts, professional discrimination, and lawsuits from creditors.
After Effects
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Bankruptcy remains on the debtor's credit file for up to ten years. With old debts wiped out, she can attempt to rebuild her credit by obtaining new credit and making timely payments.
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