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Common Bankruptcy Questions
How does bankruptcy work?
Bankruptcy is a legal status that protects borrowers from lifelong debt. Generally, after filing with a bankruptcy court an automatic stay is put in place that prevents immediate repossession of property and stops creditors from directly contacting you. After, a court appointed trustee will mediate discussions between all parties until an agreement is reached.
Are there any debts that cannot be eliminated by bankruptcy?
While bankruptcy was created to manage debts there are certain obligations that cannot be discharged. Typically most taxes, student loans, alimony payments, child support, and court-ordered penalties will remain even after filing. Also, bankruptcy does not affect any debts incurred after filing.
What types of bankruptcy are there?
There are many types of bankruptcy, but which kind you qualify for depends on your situation. The most common are Chapter 13 for personal borrowers, Chapter 11 for businesses, and Chapter 7 for both businesses and individuals. Each type handles repayments and the forfeiture of personal assets differently so be sure to explore all the options.
How long does a bankruptcy stay in my credit history?
It’s no secret that filing for bankruptcy will negatively impact your credit, but for how long? Typically, a bankruptcy will stay on your record for seven to ten years: seven for a Chapter 13 filing, and ten for a Chapter 7. It should be noted that, while you’re allowed to explain a bankruptcy on your record, you cannot have it removed.
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