How does bankruptcy work? Will the bankruptcy court pay my bills? Do they give you a Get Out of Debt Free Card?
It’s none of those. Too bad. That would be the simplist answer. But cheer up. The real answer is still pretty simple.
Allow me to explain bankruptcy.
The United States of America has a bankruptcy law. The easiest way to understand, “How does bankruptcy work?” is like this. The bankruptcy laws allow people to be released from most kinds of debts. The requirements are simple. It’s a common sense law. The court has to be convinced of two things.
- That your debts were made under honest, good faith circumstances.
- That you really can’t afford to pay any of it back in the forseeable future.
You now understand what is called Chapter 7 bankruptcy. Wasn’t that easy?
But what if you have more difficult problems? For example debts that don’t get handled by Chapter 7? For example, delinquent mortgage payments? Foreclosure? Tax debts? Assets worth more than what the law allows you to keep?
For those kind of debt problems, bankruptcy reorganization comes in handy. Chapter 13 bankruptcy reorganization is for individuals.
Chapter 13 bankruptcy works on debt problems like penicillan works on bad bacteria. Chapter 13 bankruptcy is a potent debt relief formula. It may provide a way to stop foreclosure. Stop car repossession. You can take up to 5 years to repay delinquent house payments. Also taxes, and other debts. Do you have credit card debts? Chapter 13 bankruptcy will stop the interest.
You now understand Chapter 13 bankruptcy.
You can read more in detail, if you’d like. Go here, to the Bankruptcy Guide.
You now know the answer for, “How does bankruptcy work?”
The next thing you need is a Los Angeles Bankruptcy expert. Why do you need a bankruptcy expert? Let me explain. There is a big difference betwen understanding a concept verses having the expertise to put it into practice. Here’s the best example I can give you. I have a great understanding of the mechanical workings of a motor vehicle. But I do not have the expertise to fix anything on a modern automobile. I would not even try to.