The idea of bankruptcy comes from the fact that you owe creditors money and cannot pay so you wish to receive protection from these creditors courtesy of the federal government. Of course you will pay for filing bankruptcy but it isn’t as simple as dollars and cents. In fact, you may get out of a bankruptcy by paying very little in terms of dollar and cents but you will end up paying substantially in terms of your credit.
Paying for Chapter 7 and Chapter 13 Bankruptcy
Chapter 13 bankruptcy is oftentimes referred to as “the wage earner’s plan.” If you are required to file this type of bankruptcy then you will be paying for it in dollars and cents. Your debts will be paid off with a portion of your income over the course of no more than five years. At the end of your repayment plan, any remaining balance on certain dischargeable debts could be disregarded.
With Chapter 7 bankruptcy, all your nonexempt assets are liquidated by the court-appointed trustee and the proceeds are used to pay off your creditors. You might not have to pay very much depending on the extent of your assets and which of them could be listed as exempt as per your state’s laws. So if most of your assets are qualified as exempt and your debts are dischargeable then you could end up paying very little for your bankruptcy.
Your Credit Takes a Hit No Matter What
Regardless of the number of exemptions you qualify for or the number of debts you can discharge, your credit will take substantial damage from any type of bankruptcy filing. In most cases it will take years to return your credit to a respectable level. Bankruptcy is a very serious matter so be sure to retain a quality bankruptcy attorney to be the expert at your side throughout the entire process.
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