Bankruptcy Pays the Debt
You would have heard numerous stories about bankruptcy and whether it is effective to safeguard your financial to their full worth. You would have heard of horror stories where assets have been seized and sold at a fraction of their value and the person owing the debt still owes quite a large debt after all their assets have been sold. Well there is some truth in both these, it all depends how effectively you plan and mange your bankruptcy.
Bankruptcy can eliminate most of your debts. These debts include credit cards, medical bills, loans, judgments, utility bills and many more types of debts. However there are also debts that are not eliminated and this is why you need to protect your assets to pay for these. These debts include alimony and child support, student loans, debts from fraud, taxes from the past 3 years, personal injures used caused whilst driving under the influence of alcohol or drugs and student loans. Some of these loans may also require a chapter 13 bankruptcy to protect assets that could be tied t these debts. Chapter 13 basically is for the reorganization of debts where over an extended period of upwards of 5 years some debts are repaid, some are partial repaid and others are discharged.
For debts that are not automatically discharged through bankruptcy, you assets are protected so you can use them to repay your debts and eventually emerge from bankruptcy in a better financial position. This is particularly important for handling aggressive lenders who want to liquidate your assets as quickly as possible, for whatever price.
The use of bankruptcy has been used a lot recently in the mortgage market where the full value of homes can be realized through a controlled selling process rather than the rampant forced selling that has happen over the recent past. Bankruptcy is also available to non-US citizens, as long as they assets in the US.
Tom has been writing for many years now. Not only does this author specialize in financial matters, you can also check out his latest web site at Rate this Article: