Bankruptcy is the process of relieving unpaid debt when it becomes too much to handle. There are several types of bankruptcy, but most people file for either a Chapter 7 or Chapter 13 bankruptcy.
Despite the benefits of filing for bankruptcy, many people don’t file because they don’t understand enough about bankruptcy. Here are a few questions you may have:
1. What is liquidation bankruptcy?
Liquidation bankruptcy is just another name for Chapter 7 bankruptcy. That’s because Chapter 7 bankruptcy is a process where assets are liquidated to pay off debt. This form of bankruptcy could pay off some or all of someone’s unpaid debt.
2. Will you lose everything in bankruptcy?
Chapter 7 bankruptcy doesn’t liquidate all assets. Assets are considered exempt and nonexempt. A first home or used car may be exempt but a second home or art collection may be considered nonexempt and liquidated to pay off legal obligations. Most people who qualify for Chapter 7 have no assets they will lose.
3. Can you file for bankruptcy again?
The short answer is yes, you can file as many times as you want. However, people may have to wait several years depending on what kind of bankruptcy they’re filing after their first. For example, if you filed a Chapter 7, then it would take eight years to file another Chapter 7 or four years to file a Chapter 13.
4. Should you get legal help?
Bankruptcy is often a confusing legal process. Knowing your legal options could help you when you file.