What is Personal Bankruptcy?
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Personal bankruptcy is a legal proceeding, when an individual seeks protection from his creditors, as he can no longer pay his debts. Under US bankruptcy law there are two types of personal bankruptcy; chapter 7 and chapter 13. The vast majority of consumers file under chapter 7. Chapter 7 is a complete discharge from all non-secured debts, with no further payments due. The only items exempt from personal bankruptcy are child and spousal support, student loans, taxes older than 3 years and any court-ordered payments as a result of an illegal act. Personal bankruptcy is used to remove all unsecured debt, such as credit cards and personal loans. Secured debt, such as cars or mortgages, may be kept separate from the bankruptcy. The creditors have the right to repossess these assets if the payments are not made. There are state and federal limits on the value of these assets, so check with your bankruptcy advisor. Once you have filed for personal bankruptcy, all legal actions against you s
Personal Bankruptcy is a legal process that enables a debtor to temporarily or permanently avoid paying some or all of their personal debts. The US Congress enacted the current bankruptcy code in 1978, and recently amended it in the spring of 2005.The goal of the legislation is to provide relief and structure to those members of society who have gotten themselves so far into debt they can’t possibly make the payments; a fresh start so to speak. Currently their are two forms of bankruptcy that are available to individuals: Chapter 7 and Chapter 13.
