Bankruptcy
- What is Chapter 7 Bankruptcy?
- Chapter 7 bankruptcy is a complete liquidation of all your assets and debts, with few exceptions. However all of your assets may be subject to liquidation and SALE! There are items that cannot be lost in a bankruptcy. Here is a list of those items recorded in 11 United State Code Section 522:
- Real property, including co-op or mobile home, to $15,000 Disability
- illness or unemployment benefits
- Life insurance payments for person you depended on, needed for support,
- Life insurance policy with loan value, in accrued dividends or interest, to $8000
- Unmatured life insurance contract, except credit insurance policy
- Alimony, child support needed for support
- ERISA-qualified benefits needed for support
- Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments to $400 per item, $8000 total
- Health aids
- Jewelry to $1000
- Lost earnings payments
- Motor vehicle to $2400
- Personal injury recoveries to $15,000 (not to include pain & suffering or pecuniary loss). Wrongful death recoveries for person you depended on
- Crime victims' compensation
- Public assistance
- Social Security
- Unemployment compensation
- Veterans' benefits Implements, books & tools of trade to $150
- What is Chapter 13 Bankruptcy?
- Chapter 13 bankruptcy is like a forced 3 to 5 year settlement plan with creditors. Often called "reorganization". In most cases you will pay back 100% of your debt (especially secured debts like mortgages).
- What debts will bankruptcy not discharge:
-
- Child support & alimony
- Student loans that became due less than 7 years ago
- Federal and state income tax obligations less than 3 years old
- Debts for restitution from criminal convictions and drunk driving
- Debts the bankruptcy court decides where from intentional acts, fraud or wrongdoing (e.g. lying on your bank loan application).
- How long will bankruptcy stay on my credit report?
- Up to 10 years.
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