Nov
Very often the debtors consider bankruptcy as their ultimate solution of overgrowing debt problem. To get out of credit card debt they apply for bankruptcy.
Coming to that there are two types of bankruptcy available to you. These are chapter 7 and chapter 13 bankruptcy. Both these processes of bankruptcy are regulated under the federal and state laws in United States.
When it comes to the chapter 7 bankruptcy, it is quite well organized procedure that is controlled through court supervision. A trustee is formed that collects all the assets belonging to the estate of the debtor. Then the trustee proceeds on to convert such assets to liquid cash for distribution among the creditors.
The procedure does not take away the inherent right of the debtor to retain certain properties that are exempted from liquidation under either the State or the Federal laws. At the same time it does not call off the rights of secured creditors.
Before you opt for the chapter 7 bankruptcy, you should take care to go through the provisions in respective state laws as they differ from state to state.
One limitation with this form of bankruptcy is that you cannot keep assets other than those exempted under the state or the federal laws. The debtor gets discharge from personal liabilities in some debts within a period of 4 to 7 months at most. Creditors who hold unsecured claims will only get his share if it is an asset case and he files proof of claim before the bankruptcy court.
Else, it is good bye to such creditors.