Increasing number people are filing for bankruptcy to get out of debt. But,
what is bankruptcy? Do you know enough of it? How does it help you? If these
questions also bother you, the following article describing 7 most important
things about bankruptcy will help you get an answer.
1. Bankruptcy is
process adopted by federal court process catering to individuals and businesses
repay their debts or clear their debts under the protection of bankruptcy court.
Also known as "reorganizations " or "liquidations", bankruptcy is often the last
recourse to get out of any debt.
2. When the property of the debtor
is sold to recover and pay off the debt it is called Chapter 7 bankruptcy.
Contrary to popular belief, all the property owned by a debtor is not sold, some
part of it is left with him to allow him to start afresh.
3. When there
is no sale of property but the debt are reorganized so as the debtors, are able
to repay them over a long period it is called Chapter 13 bankruptcy.
4. Both these types of bankruptcy have a large number of rules, and exceptions,
suited to different kind of debts, individuals and other concerns.
5. The "ticket in" is counseling session that everyone who wishes to file a
bankruptcy must attend. This session must be attended at least six months prior
to filing for bankruptcy. This term was adopted in the new bankruptcy law.
6. The "ticket out" means to attend a financial education class from
listed agencies before getting approved for bankruptcy. This was also adopted by
new law. During this session the the court will also determine according to
predetermined standards by IRS that what all is required for food, clothing,
shelter etc. and what all can be used to recover debts.
7. The bankruptcy court determines whether or not you can qualify for
chapter 7 bankruptcy.