Saturday, February 3, 2007

Bankruptcy Facts

Since bankruptcy is a situation that seems to be hitting more people it is best to know some bankruptcy facts. These facts can help you to understand what happens when you claim to be bankrupt. The first fact that you will need to understand is that filing for bankruptcy is not the end of the world.

Bankruptcy is a way for you to suspend the different debt collections that are being carried out in your life during the time that you have somehow managed to collect lots of debts. Once you have filed for bankruptcy the court will grant an automatic stay order.

This stay order will prevent the different debt collection agencies from trying to collect their debts while the court is looking into your tangled up finances. According to the known bankruptcy facts, during the time of your bankruptcy money cannot be collected from you by your creditors.

These individuals will need to talk to your lawyer to find information about the debt payment. These creditors can however petition the court for relief from the stay order. This relief order will provide them with the ability to collect any secured debts that you have written over to them. This is the only way that these creditors can collect money, property and assets from you.

By knowing about bankruptcy facts like this you can make sure that you are careful about assigning your property as security to credit companies. There is another bankruptcy fact that you should know about. In this fact once your bankruptcy payments have been fully paid off you will be discharged from further debt payments.

At this point former creditors will no longer have any claim on you and they can not force you to pay any more of the former debts. However if you do happen to get into credit difficulties with these same creditors once more they will have the right to seek compensation for these new debts that you have incurred.

As you look through the various bankruptcy facts and advice, you will see that in most cases your assets that can be turned into cash must be turned over to a bankruptcy trustee. This court appointed person will make sure that you are paying off your debt in a reasonable manner.

You disposable assets once they have been liquidated will be distributed amongst your creditors. This is also another way for you to discharge your bankruptcy charges. There are many other bankruptcy facts that can help you to avoid being in trouble with the various people to whom you owe money. You just need to talk with your lawyer for help.

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