The Most-Asked Bankruptcy FAQs

Posted by Anne Drake

September 10, 2008

by Ned Shermin

A bankruptcy FAQ is very useful for someone thinking of filing bankruptcy. A bankruptcy FAQ often starts with the most common questions about bankruptcy that most people in financial trouble ask. Basic information is included such as how to file bankruptcy or how to choose the type of bankruptcy to file. Chapter 7 bankruptcy and chapter 13 bankruptcy are among the most common types of bankruptcy to file.

Often the most commonly asked question about bankruptcy is how to go about filing bankruptcy. When someone is in way too much debt and cannot pay them off, bankruptcy comes to mind. A bankruptcy FAQ will explain different types of bankruptcy that a person or a business could file. The first step is to file a petition for bankruptcy and then pay all necessary fees.

A person needs to know that there are many types of bankruptcy not just one. A bankruptcy FAQ often introduces chapter 7 bankruptcy, chapter 13, chapter 11 as well as chapter 12 with more emphasis on chapter 7 and chapter 13 for individual bankruptcy filing and chapter 11 for business filing. It is important to file a petition for the right type of bankruptcy.

Most people consider filing chapter 7 bankruptcy first and foremost because they have been told that chapter 7 bankruptcy eliminates most of the debts. However, the new bankruptcy laws have made it more difficult to file chapter 7 bankruptcy. Added to the fact that many people want to keep some assets, they opt for filing for another type of bankruptcy.

Chapter 13 bankruptcy is often the highlight of a bankruptcy FAQ because it is the most common type of bankruptcy filed nowadays. In a chapter 13 bankruptcy, debtor filing chapter 13 comes up with a repayment plan that the court approves to pay off most of the debts to the creditors. Some debts are discharged but most are not.

The cost of filing bankruptcy is also one of the most common question in any bankruptcy FAQ. It generally costs only a couple hundred dollars to file bankruptcy including the court fees and administrative expenses. However, many people hire a bankruptcy lawyer to help them therefore increasing the cost of filing many fold.

Most people file bankruptcy because they want the debts to be dismissed. However, people are always surprised that many of the debts are not discharged afterall. Bankruptcy laws detailing what debts are discharged are quite complex. Taxes, for example, are usually not discharged with either chapter 7 or chapter 13 bankruptcy.

There are so many questions about bankruptcy that a person seeking to file bankruptcy needs to know. A bankruptcy FAQ should give an overview of filing bankruptcy as well as answers important questions that most people have encountered. Do not file bankruptcy if you have other options.

About the Author:

This article was a small taste of our library of Bankruptcy FAQs that we have gathered and answered over at the free Bankruptcy Laws resource site. Visit us today to find the answer to your bankruptcy questions!

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