Do you finding yourself in a situation where the amount of debt you owe continues to grow every day and you are unable to get things under control? You may begin considering credit card bankruptcy to help clear away your current debts and start out with a clean slate. You have the legal right to claim bankruptcy, but it is in your best interest that you use professional services to keep things organized, answer your questions and in the end get the most debt erased, freeing you from the burden and giving you back control.
If you have made the decision to proceed with a bankruptcy, I am sure that you have at least a few questions about what is going to happen and how certain things will be handled.
First, there are two forms of bankruptcy. Chapter 7 and chapter 13. While there is a lot of legal information concerning the two types, they can be easily broken down.
In a Chapter 7, all assets that have not considered exempt will be auctioned off to pay for your debts. The remaining balances will be erased except with certain types of debt.
With Chapter 13, you will get to keep your assets, but you will have to make monthly payments for between 10% and 100% of the total debt, but for no longer then 5 years.
401K.
If you have a 401k policy with your place of work and are worried that they will take the money you have saved to pay back your creditors, relax. In almost every case, a 401K is considered an exempt asset. There may be situations where a portion of the money may be taken to pay back your debt, but most times a 401K is safe in credit card bankruptcy.
Car or vehicle
One common misconception that many people have is that their vehicle will not be considered an exempt asset. The process is complicated, but the court will take into consideration the blue book value of your vehicle and compare it to a value each state has. If it is less, then you will likely be able to keep your car.
Collection calls and other harassment.
Anyone who owes money has likely run into these. Constant calls made to your home and even to your place of work in an attempt to "collect" money you owe. If it goes on for long enough it can seriously affect your life. Once you have filed for credit card bankruptcy you are 100% protected by something called automatic stay. This means no more calls, no more mail. If they continue calling, you actually have a legal right to sue them.
The one thing you should never mess around with is getting yourself bankruptcy help. With the right help you will be able to get out from under crippling debt and get back on track with your life.
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