THE ULTIMATE BANKRUPTCY LESSON
If you are contemplating bankruptcy you first must dig deep to decide if it is really the right move. If your debts are equal to your income, then you obviously have a big problem. But before you make any decisions, first ' 'meet with a bankruptcy attorney before you make any decisions. It is important to understand all your alternatives. An attorney will also explain what will likely occur if you do decide to proceed with a bankruptcy filing. For example, you could lose your home and your car. That's why exploring all your options with a lawyer who specializes in bankruptcy is so important.
Types of Bankruptcy:
Chapter 7: The most common form of bankruptcy. This is the chapter of the Bankruptcy Code that provides for "liquidation," that is, the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors. In order to be eligible for Chapter 7, the debtor must satisfy a "means test." The court will evaluate the debtor's income and expenses to determine if the debtor may proceed under Chapter 7.
Chapter 11: A reorganization bankruptcy, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. Individuals or people in business can also seek relief in Chapter 11.
Chapter 13: The chapter of the Bankruptcy Code providing for the adjustment of debts of an individual with regular income, often referred to as a "wage-earner" plan. Chapter 13 allows a debtor to keep property and use his or her disposable income to pay debts over time, usually three to five years.
Video: Watch Suze's emotional financial intervention with Marko and Maureen.
Money Lesson: When bankruptcy is your only choice, then stand in your truth and move forward. Remember, people first, then money, then things.