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Everything You Should Know About Bankruptcy
January 25, 2022
Having a business that is already unmanageable and is facing a considerable amount of debt, or you’re facing foreclosure, then you might think of filing for bankruptcy. While it may be the only option you have, you should know more about bankruptcy.
There are two types of bankruptcies for both individuals and companies. These are liquidations and reorganizations.
What is liquidation or the chapter 7 of the bankruptcy code? For all debts except for child support payments and taxes, a court appoints a trustee to look into your assets to pay back your creditors.
However, it is only allowed to keep a certain amount of stuff called exempt property, which means any not exempt property is sold to pay back your creditors; you can also stretch this out if you have a great bankruptcy law firm. Most people rely on a bankruptcy law firm to do what it takes to save a few possessions.
What is a reorganization of debt? This tells individuals that making monthly payments for 3 to 5 years depends on how much money you make and your daily expenses. What makes this a great idea is the possibility of stripping your second and even third mortgages from your home. For businesses, the judge will look at the numbers and reduce the business amount of debt to a figure to allow the company to continue operating while paying a certain amount of its debt.