What Does Bankruptcy Mean?
Bankruptcy is a final resort employed by debtors when they are no longer in a position to pay back their creditors. Bankruptcy reduces or eliminates debt through a court process.
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Bankruptcy Court
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A bankruptcy court is a federal court with the sole duty of processing bankruptcy cases. Bankruptcy courts are set up in nearly all of the 94 federal judicial districts.
When to File for Bankruptcy
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Bankruptcy should be viewed as a last resort for severely indebted individuals and companies. This decision should be made through the consultation of a lawyer.
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Ramifications
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There are several consequences associated with filing for bankruptcy. These include reduced ability to obtain loans, jobs, mortgages and life insurance.
Chapter 7 Bankruptcy
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Chapter 7 bankruptcy eliminates all of a person's debt. It also includes the liquidation of all of a person's assets not protected under state and federal bankruptcy law.
Chapter 13 Bankruptcy
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Chapter 13 bankruptcy allows a person to set up a repayment plan to pay back the largest possible portion of a person's debt.
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